Pick out any current media commentary and you will find the new common given: among consumers (quoting) “the constant drumbeat of negative news was becoming a self-fulfilling prophecy.” And “..all but guaranteeing that the economic situation will get worse.” Hit “select” in your memory for your favorite source and any quarterly report over the last five years, it will be there, the implied blame on the consumer for the slide of the economy. Were we to cast off our demons of “doubt” (read ‘uninformed naivete’) the wheels of industry and finance would retread and pull out of the ruts.
In contrast, there have even been comparisons of Warren Buffet’s purchases into GE and Goldman Sachs to J.P. Morgan’s Central Bank in the early 1900’s, lauding it as “profitable patriotism.” The same truly is to be ascribed to T. Boone Pickens’ folksy clarion call to wind power.
Perhaps we “doubting consumers” are in dire need of courses in interpretative logic. In our limited grasp of the published data we just fail to understand, hence keep sliding into an abyss of “doubt”. Worse, we begin to presuppose connections among the following:
- The hundreds of thousands of jobs lost in the country over the last two years.
- The insecurity of existing jobs due to mergers, constrictions, and unannounced closures.
- The loss, for instance of thousands of jobs in Florida in 2010 when NASA shuts down its shuttle program and begins to purchase services from Russia.
- The report this week that 70% of U.S. airlines outsource their services to other countries.
- The will-o-the-wisp political promises that the new, clean automobile will be built in Detroit.
- The recent drop-in-the-bucket stimulus was a worthless palliative.
- ad nauseam.
It’s axiomatic for manufacturers and their admen that when all else is faltering undigested, flying the flag and spewing praise at the attributes of the American worker in front of the issues will work wonders. J.P. Morgan made a lot of money. Mr. Buffett admits that he just dealt in very favorable terms; I submit that when the executives of those companies chart the use of Mr. Buffett’s or Mr. Pickens’ funds they will allocate them not along “profitable patriotism” but to the column that displays the greatest “cost efficiency”. The veins of which flow through China, India, Singapore, Viet Nam et al. and the banks for which may be waiting in the Cayman Islands or Dubai.
There is one issue on which we paltry, unconvinced, uneducated consumers will have no doubt: those components and appurtenances for the “green” infrastructure will ride the same conveyors of globalism. The wind blades will be made in Korea, the motors in China, the transmission lines in Mexico, and the service spreadsheets monitored in India or Pakistan. The cycles of the U.S. economy are relics of history, evolved into sine curves, with closer and closer wavelengths. In the grand scheme the U.S. has been assigned its place and dubbed with the moniker “consumer”; other countries with that of manufacturer and producer.
For those who forgot, or never heard it first hand as I did, the greatest indictment of the industrial revolution came from Walter Reuther to the president of General Motors as he was proudly displaying his new robotic technology: “Robots don’t buy automobiles.” Mr. Reuther did not know that his prescience would portend the more lethal impact of globalization on the U.S. worker and economy. The last ten years have proven him right.
Tags: globalization, outsourcing services, self-fulfilling prophecy