Lost your job to Globalization?

By Jules Lombard

In my last post (“We can change the world”) I quoted Steve Jobs as saying: Those who are crazy enough to think they can change the world are the only ones who do.

The logical next argument is: When the world changes, most people are swept up by the change. They become either victors or victims.

Judging from the established fact that 2% of the people become unbelievably rich as a result of the world’s changes and 98% are struggling to make ends meet, we can safely conclude that most people are victims of the changes.

Consider the iphone.
1. It replaces the home telephone. Telephone-making companies such as Bell Labs have become obsolete. The workers at Bell Labs and other makers of telephones have lost their jobs. They are victims.
2. It replaces mapmakers, through the maps app. Map publishers have lost their jobs.
3. It replaces the phonograph and the cd player. Employees in those industries are the victims.
4. It replaces the desk calculator, the newspapers and magazines. More people lose their jobs. More victims.
5. Every app you see in the iphone represents an industry that is either obsolete or on its way to obsolescence.

What does this all mean? Change is dislocating. One minute you have a job and a career. The next minute you are pounding the pavement.

If you see history as a river, and all events feed into that river – most modern historians subscribe to this new reading of history – then that river now goes one way. From Shanghai to Rotterdam.

The big shipping firm, Maersk Line, according to Bloomberg Business Weekly, is betting its future on a giant ship that, when made to stand on its stern, is almost as tall as the Empire State Building. “It can carry 182 million ipads or 111 million pairs of shoes from Shanghai to Rotterdam,” is how the Bloomberg article describes it.

It’s a sign of the times. In the coming years, 20 of these ships will be built.
The world has indeed changed. China produces, the world buys and consumes.

Meanwhile, in America, employees of Walmart, McDonalds and foodservice workers at Las Vegas casinos are on strike. They are demanding a living wage. If you have a family, how can you survive if you are making $8 an hour, they ask.

You can’t. So the employees are demanding an increase in their wages to $12 to $15 an hour.

Guess what? Even if they get their higher wages, they won’t be able to make it either.

What does this all mean? It means that down the road, the Americans who work today will have very little to show for their lifetime of struggle and trying to build a nest egg. Most Americans will retire with practically nothing, or not retire at all because they can’t afford to retire.

The statistics are troublesome. 90% of working Americans are now working in service industries. Manufacturing accounts for 8% of working Americans, and agriculture represents the balance. In 1950, 30% of Americans worked in manufacturing and manufacturing-related jobs.

What this means is that only 8% of working Americans are assured of a middle-class lifestyle. The rest, the service workers, must choose which service sectors they enter, and must study long and hard to make themselves eligible to work in decent-paying service jobs.

Increasingly, today’s college graduates must go back to school to make themselves qualified for high-paying service sector jobs.

If they fall into the McDonald’s and Walmart type occupations, it will be a tough slog for the rest of their lives.

There are many reasons, many causes of the American worker’s decline. To us here at the American Consumer, the biggest symbol of this decline is the World’s Biggest Boat, the Maersk boat that carries goods from Shanghai to Rotterdam on that one-way river called globalization.

If you ask anyone, they will tell you there is no turning back. And we agree. We cannot bring back America of the 50’s, or the 60’s, or the 70’s. Or even America of the 80’s.

But we can build a new and vibrant America. Instead of only 8% of Americans working in manufacturing, we can bring the number to perhaps 20%. We will never be able to duplicate the 1950’s, when 30% of Americans worked in manufacturing. But certainly we can go up to as high as 20%.

It all goes back to the point that we have been trying to make over the past year in this blog. If we insist, as a country, that 51% of all manufactured products sold by the major multinationals and foreign corporations in the U.S. are manufactured within our borders, half of the manufacturing jobs that we have lost will start coming back.

Manufacturing jobs have always paid more than service jobs, so many more Americans will once again have the middle-class lifestyle within sight.

Over the past year, I have laid down a blueprint for achieving this goal of strengthening American manufacturing. A lot of you, dear readers, have encouraged me to write more on the subject. There is definitely a lot of interest in crafting America’s new world.

Are we “crazy” enough to get it done? We’ve always been a “crazy” people, a people who defy conventional wisdom, who challenge the elements, who blaze trails, who have tamed the West, who believe in a manifest destiny.

We are the American Consumer, the most powerful economic engine in the world.  Let us never forget that.  We decide if we are victors or victims. And hell, no, we will not be victims any longer.

We have always believed in ourselves. Let’s get this thing done.

(You may post comments in this blog or email me at JLombard88@gmail.com.)

We can change the manufacturing world

By Jules Lombard

I was watching the movie “Jobs” a couple of weeks ago when I was struck by what the late Steve Jobs said in one of his speeches. His character, played by Ashton Kutcher, said in the movie: “Those who are crazy enough to think they can change the world are the ones who do.”

One has to be crazy, or act crazy in order to change our world. Sane people cannot be depended on to attempt to change their world because sane people think safety first.  Many think only of safety and security.

What was Steve Jobs referring to when he implicitly admitted that he was crazy enough to change the world?

He obviously was referring to the Imac computer, which was the rave in the computer business at one time. Did his prescience provide him with a front seat view of the world of the ipod, which would eventually lead to the iphone and the ipad?  Probably not.  Not even Jobs could have predicted that we would use the telephone as the portal to our Internet-crazy world.

Surely at the time that he was extolling the virtues of the imac multi-colored computers he did not actually see in his imagination the ipod.

What we do know for certain, however, is that Steve Jobs was one of the early proponents of globalization, which in my vocabulary is a dirty word. Globalization has meant the step-by-step destruction of the massive American manufacturing world and by the shipment of that manufacturing to faraway countries, mainly China.

Fast forward to Steve Jobs, the biography by Walter Isaacson. Jobs in that book justified his decision to manufacture the iphone and ipad in China by saying that it was so much easier to manufacture in China because there are so many engineers there, compared to the engineers in the U.S.

Was that so? Then why did we not import engineers from China? We import doctors and nurses from many countries. Leading up to the turn of the 21st century, we imported hundreds of thousands of computer specialists into the U.S.

The truth is, Jobs wanted to manufacture in China, not because of the engineers there but because of the cheap labor. The people who are building the iphone and the ipad and 2/3 of the electronics products sold all over the world are ordinary folks. Many are kids as young as fourteen. There are tens of millions of them scattered all over China, and they are not engineers.  Many were starving in farms until they were plucked from their overcrowded neighborhoods and installed in overcrowded tenements run by the FoxConn manufacturing behemoth.

They are virtual slaves living in cramped apartments in high-rise buildings and made to work sixteen hours a day, seven days and week, 365 days a year.

Many have tried to commit suicide, a good number of them having been successful.  The high-rise buildings have nets all around them to catch the would-be suicides, but not all the jumpers are caught by the nets.

Steve Jobs was crazy enough and successful enough in changing the world, and today’s world is the result of that change.

The world, dear readers, is not the way it is because of some rule about the rise and fall of civilizations, which the academicians and the China apologists are trying to sell to us.  Those blokes tell us that the decline and fall of the American economic empire is inevitable because of some “law” about the rise and fall of civilizations.  No siree, the world is the way it is because of some “crazy” people who have changed it.

One could argue that other CEOs, such as the CEO of Nike and of Intel actually started changing the world by manufacturing in low-wage countries. That argument definitely has merit.

What we’re talking about here, however, is the mass migration of U.S. manufacturing to China and other low-wage countries. That did not happen until the turn of this century and Steve Jobs was one of the most vocal trendsetters.

We’ve got news for them, dear readers. We’re going to bring the world back to where it should have always been.

We are going to bring manufacturing back to the U.S. and having done that we will encourage other countries to start manufacturing the products that they consume within their borders.

We will rebuild our world so that factories are sprouting up all over the world instead of in places like China, Mexico and Brazil.

Initially, manufactured goods will be more expensive, but that’s OK because people will have good-paying jobs and can afford the higher prices.

Eventually, factories will be able to find the optimal mix of man and machines and improve productivity.  Then prices will come down again.

We will make the CEOs who are making huge fortunes at the expense of the workers obsolete. CEOs will no longer make 700 times what the average worker in their companies make. Why? Because corporations will no longer be shamelessly making products exclusively at Chinese prices and selling them in the U.S. and Europe at U.S. and Euro prices.

The stock markets will initially slow down in its ascent to never-before-reached heights, but with manufacturers doing very well in all the economies of the world because they are creating jobs everywhere and not being perceived as exploiters of local economies, the boom in manufacturing will be celebrated around the world.

We here in The American Consumer community can see that future. But that future, we suspect, is down the road a long ways.

What will jump-start that march into the future is bringing manufacturing back to America and making America the model for the whole world.

We will work tirelessly because we have the passion. We in our community want to make things again. We want to make those Nikes here. We want to make the iphones, ipads, Intel chips, Caterpillar tractors, Hollister shirts, GE television sets, Vizio electronics products right here in good ole U.S. of A.

We will make only enough of those products so that a little more than half of those products that we buy in the U.S. are made right here.

Initially, China can still make the bulk of the other items sold around the world. But, with the American experiment being successful, we expect the Spains, the Italys, the Greeces, the Australias, the other countries to follow in America’s lead.

We expect other countries to insist that the bulk of manufacturing of products sold in their markets are also made within their own borders.

The result will be a boom in factory construction and in manufacturing. Everybody will benefit because the continuing industrial revolution will go on forever – everywhere.  In Asia. In Old Europe and in New Europe. In Central and South America.  In the African continent and the Middle East .

Let me repeat: prices will rise intially, but that’s OK because people will have good jobs and will be able to afford the higher prices. But, eventually, the world will discover the optimal mix of man and machines which will cause prices to start heading south.

This is the world we envision. We can create that world. We only have to be “crazy” enough to attempt it.