Signs of U.S. Decline

By Alan Caruba

Let me begin by saying I am not an economist, but I have had a rather unique “education” in the way American’s make a living, thanks to a long career as a public relations counselor working with corporations, trade associations, and others across a broad band of manufacturing and other activities, including agricultural.

My working philosophy was that, if I could understand what they were doing, anyone else could as well. Along the way I learned that farming has got to be one of the hardest ways to make a living. It is just dawn to dusk work. Next to that is manufacturing anything.

So, naturally, when Business Week magazine asked on its cover, “Can the future be built in America? Inside the U.S. Manufacturing Crisis”, it caught my eye. As Pete Engardio, the reporter, put it “The good news is that the U.S. is at or near the cutting edge in most of the emerging product areas,” particularly high tech, the bad news is that “Unless the U.S. can magically resurrect its manufacturing base, the good-paying jobs from these breakthroughs will be offshore.”

The irony is that the high tech breakthroughs were paid for with billions of U.S. taxpayer dollars that funded research at federal and university science labs, going back to the 1960s when the new products were just in the idea stage.

The numbers, too, tell the story. “In 2000 the U.S. exported $29 billion more high-tech products than it imported”, but “by 2007 that had turned into a $54 billion trade deficit.”
This is attributed to “two decades of unconstrained out-sourcing to Asia” that has “hallowed out much of America’s base of suppliers, factory managers, and skilled technicians.”

Not mentioned in the article is the way America’s schools have since the 1960s been turning out students with poor math and science skills, along with writing and reading skills. The average freshman college student spends time in “remedial” courses for things earlier generations routinely learned. Add to that the crushing costs of a college education and you have a recipe for a dumbed down and debt-ridden work force.

While we’re being told that the recession is “technically” over and jobs are a “lagging indicator” of recovery, my own worst suspicions are that jobs in general are going to be lagging for a long time to come, especially the skilled ones that nations like China and India are developing with rigorous educational systems.

“Nations in Asia and Europe aggressively court strategic high-tech industries with generous tax breaks, cash grants, cheap credit, low-cost utilities, and speedy regulatory approval.”

“By comparison, the U.S. has been indifferent to manufacturing; even when tax breaks are factored in.” Philosophically, the Obama administration appears to regard both Wall Street and corporations as an enemy that must be subdued with greater and greater regulatory oversight.

The fact that the existing oversight agencies failed in their duties does not seem to be understood. That’s why ponzi schemer, Bernie Madoff, and others were able to get away with it for years.

“Also, it can take two years to obtain all the environmental, health, and safety permits for a modern electronics plant—a lifetime in the tech world.” It’s a lifetime in any business enterprise. The U.S. manufacturing base may be the most heavily regulated segment of society of any nation with which we must compete.

Consider, too, the guiding philosophy of the Obama administration. Anything that contributes to the provision of energy is bad. Coal mines, bad. Offshore oil and natural gas drilling, bad. Anything, too, that uses energy is bad.

America’s auto manufacturers (the federal government and the unions now own General Motors and Chrysler) are being told they must get more mileage out of a gallon of gas, forcing them to modify automobiles in ways that simply make them more dangerous to drive.

In response to a survey by Deloitte Research and the Manufacturing Institute, U.S. executives said they believe that America’s competitiveness will decline further by 2012. An overhaul of the corporate tax code would be a good place to begin to reverse that. U.S. corporations pay higher taxes than just about anywhere else in the world!

These and other indicators are signs of decline in what used to be the greatest economy the world had ever seen. Other nations have watched and learned the lessons we have forgotten or reject. They are going to eat our lunch.

Government is Bad for Business

By Alan Caruba

Why would the leaders of U.S. auto companies, two of whom are facing bankruptcy, gather around the President as he signed legislation requiring higher mileage per gallon when surely each knew that there is a finite amount of energy to be secured from a single gallon of gasoline?

They knew, too, they would have to build smaller, lighter, deadlier cars for anyone driving or who is a passenger in them; if, indeed, anyone will want to buy them or will be able to afford to buy them because their cost will increase with this new useless, senseless government mandate.

To meet a 35.5-mile-per-gallon standard by 2016 they might as well make cars out of papier-mâché. The new standards are yet another environmental delusion that the laws of thermodynamics can be replaced by ideology. Approximately 40,000 Americans die on the highways every year. Watch that number increase as the new standards kick in.

You and every other American is being taken for a fool because those who conjure up the stupidity these standards represent know you were never taught enough in school to understand what a fraud is being perpetrated against you.

This is why they can get away with airy references to “green jobs”, “clean energy”, and the greatest absurdity, an “energy independent” America that currently is forced to import much of its energy because U.S.-based natural resources have been put off-limits by the U.S. government.

Over the course of my long career as a public relations counselor, one lesson in particular has been learned. In general, people who run businesses run scared. When under attack their first instinct is to lay low and their next instinct is make any changes foisted upon them, even if they are based on bad science or lack common sense.

There’s a reason why you see television ads talking about the need for “all forms” of energy. They are the way energy providers are attempting to stem the tide of anti-energy rhetoric pouring out of the White House and Congress, while educating the public to the reality of how and where the energy they use is actually produced.

No coal? Half the electricity we use is generated by coal. No oil? All the gasoline is refined from oil, along with all the plastics we use. No natural gas? It heats millions of homes. Nuclear? It is good for twenty percent of our electricity.

Usually businesses and agricultural interests band together in trade associations to fight against injurious legislation. Washington, D.C. is home to a legion of government relations executives and agencies whose job is to spot trouble early and to convince legislators to avoid signing onto bad legislation or to modify it before it becomes the law. Without them, Americans would be suffering even more due to the idiotic legislation that is generated daily in Congress.

While the natural conflict of competition is the air corporate executives breathe, any conflict involving the U.S. government is necessarily buffered by lawyers, government relations specialists, and public relations professionals whose job it is to present the side of the argument the mainstream media generally ignores or distorts.

Corporate executives are not cowards. They do battle every day to increase their company’s profit margin, to protect its reputation among investors and with financial institutions, and to fund research and innovation. They also work hard to hire the best people and to keep them motivated and happy. That’s what bonuses are about and countless other programs corporations provide their employees. It’s good for business!

Congress, whenever it wants to intimidate some element of the business community, will drag them to Washington and then grill them mercilessly for the purpose of making them look evil. It is always a charade. Behind closed doors these same politicians can be found imploring the same corporations to give them campaign money.

In these times corporations have much to fear. Americans have elected a President who regards business and industry as the exploitation of workers, forgetting that they benefit employees, vendors, investors, pension funds, healthcare programs, and of course consumers.

Obama distrusts hedge funds and others who have made loans to businesses. He feels empowered to order the resignation of executives, alter the composition of corporate boards, and abrogate fundamental contract law. This is a man who has never so much as run a local Dairy Queen franchise!

It is useful to remember that virtually all of the recessions and the Great Depression were brought about, not by corporations and small businesses, but by government interference, usually involving exports and imports, but also by giving support to unions that, as often as not, saddled businesses with demands that slowed production and drained profits needed for growth.
It was not the financial community that came up with the notion of giving sub-prime mortgage loans to people who would, under normal banking practices, not qualify. That was a government idea. The fact that Fannie Mae and Freddie Mac ended up owning half of all the mortgages was a government idea.

Bailouts to banks, insurance companies, and auto companies were government ideas, but not constitutional ones. So far, the evidence suggests they were bad ideas.

Capitalism is a high risk venture. That’s what it’s supposed to be. Most start-up companies fail fairly quickly, but some grow and prosper. They expand and hire more people.

By contrast, all of us would benefit from a smaller, less intrusive government.

When corporations must deal with the government they are understandable wary and sometimes even fearful. They have reason to be.

The Relentless Greening of America

By Alan Caruba

The late comedian, George Carlin, did a riff on environmentalists in which he castigated them and everyone else who thinks humans should or can “save the planet.” He reminded the audience that the Earth is 4.5 billion years old, that 95% of all the species that ever lived are extinct, and that the Industrial Revolution is barely two hundred years old. The notion that, somehow, humans are destroying planet Earth is absurd.

The planet is just fine and totally indifferent to anything humans do. Humans over the past 200,000 years have learned how to build shelters and raise food. With regularity, the Earth reminds them who’s really in charge by providing them with earthquakes, tsunamis, volcanic irruptions, floods, fires, hurricanes, tornadoes, and blizzards.

Anyone who has spent any time experiencing nature knows it can be inspiring, but also too wet, too cold, too warm, and comes with a full supply of bugs and other creatures that think you’re dinner.

If people only experience nature from films and television, they have a scant notion of the reality. When you add in a total lack of knowledge or understanding of the weather, the climate, the atmosphere, how the Sun functions, the role of the Moon, and a thousand other things that constitute our environment, the fact that they can be led to believe lies about the environment should come as no surprise.

Like the proverbial fish in water, most people are utterly clueless about how anything works. It makes them vulnerable.

Then, when you add in a fulltime, non-stop, massive and multifaceted propaganda campaign, the odds that people will believe that the Earth is running out of oil or that coal is “dirty” or that it’s wrong to raise livestock to feed people or wrong to eradicate the many insects or weed species that attack wheat, rice, apples, cotton and every other crop on which we depend. Fully 80 percent of infectious diseases that kill off humans are transmitted by insect and rodent species.

All this leads me to take note of “Hollywood Goes Green”, a summit meeting to be held December 8-9, that has the lofty goal of “Helping Hollywood increase profits and lower costs in today’s volatile economy through sustainable innovation and corporate responsibility.” Other than the reference to increasing profits and a volatile economy, this is gobbledygook and gibberish. The only responsibility a corporation has is to make a profit, pay its workers a fair wage, its investors a dividend, and produce products and services of value. Saving the planet is not a priority, but not despoiling it is.

The Hollywood summit conference brings together many elements of the communications and entertainment industries. Keynote speakers will include people from the Fox Broadcasting Company, General Motors, HP, and the Walt Disney Studios. Other speakers and panelists will represent more than 40 enterprises that include News Corp, Discovery Channel, MTV Networks, the Southern California Edison Company, and Twentieth Century Television, to name just a few.

This great group hug is sponsored by iHollywood Forum, an entity that exists to put these confabs together so dedicated Green advocates can rub shoulders with technology executives and others. It is a mix of proselytizing and the opportunity for corporate folks to demonstrate how Green they really are.

Little wonder there is virtually no evidence of “the other side of the story” when Americans wonder why, if global warming is real, the Earth is actually in a decade-old cooling cycle that is going to get colder and last easily to 2050 or beyond. When you’re being force-fed Green lies by representatives of Hollywood, the news media, and major manufacturers, it is just so hard to know what is true.

What is true is that General Motors is on its last legs unless it declares bankruptcy and restructures itself. If not, it will take a big chunk of the staggering U.S. economy down the toilet with it. What is true is that the Southern California Edison Company had better build some more power plants or its customers are going to soon experience brown-outs and black-outs on a regular basis. And I am not talking about solar panels and wind turbines. I am talking about coal and nuclear.

What is true, too, is that Americans looking for a bit of entertainment from the film and television industry will continue to find all manner of Green messages intended to introduce and reinforce both old and new lies. The news industry has long since abrogated any allegiance to the truth.