Monday, January 26, 2009

An open letter to Vice-President Biden

Mr. Vice-President:

I’m just watching your interview on Face the Nation (Sunday, January 25, 2009) and when the question was asked “Aren’t things worse that you thought?” you replied “Things are worse than anyone thought!”

Mr. Vice, I beg to differ. The working people who have been watching the job market collapse have known things were bad for years before it got bad enough hit the people you are listing to. Michigan was the canary in the coal mine and our leaders ignored it. My industry, technical writing, has been bleeding jobs for 10 years and no one paid attention. The textile industry in the southeast was decimated and that too was ignored.

The real problem is that as long as things are good in New York, L.A., Atlanta, and Washington (DC) the politicians and media talking heads can ignore anything. You’d be better served to have a policy board of plumbers, electricians and small business owners to help you understand what is happening the the rest of the country.

According to Time magazine's business section on line (,8599,1873234,00.html?xid=rss-business) the American Recovery and Reinvestment Bill of 2009 addresses the government’s planning failures.

At the beginning of the bill, the authors write: "Since 2001, as worker productivity went up, 96% of the income growth in this country went to the wealthiest 10% of society. While they were benefiting from record high worker productivity, the remaining 90% of Americans were struggling to sustain their standard of living. They sustained it by borrowing ... and borrowing ... and borrowing, and when they couldn't borrow anymore, the bottom fell out."

If we are expected to trust this bill, we must accept this part of their analysis. Something that any person working in a factory, as an auto mechanic, or like me - writing technical manuals already knew and tried to tell you and all our representatives. You listened to the “experts” and that’s good, the problem is that you should have ALSO listened to us. You need to bring in a different set of ordinary people both working and out-of-work on a regular basis to include their representative problems in your calculations. And how about weighting your sources toward the practical (those regular folks) and not the theoretical (those experts again)?

Thursday, January 15, 2009

Detroit and a lack of vision.

As I write this, the cable TV show Car Crazy is on in the background and listening to them talk about how much they like the look of old cars got my attention. One of the people being interviewed made an interesting statement - “It doesn’t matter if your a ‘car guy’ or not, almost everyone who sees a well restored old car goes Wow!”.

And it started me thinking, back in the day cars were very different between manufactures. Fords looked different from Chevy or Chrysler. Within manufacturer’s product lines, cars looked different. Chevy looked different from Pontiac, Fords from Mercury and so on.

Look at the cars the people love/hate and they each have a distinctive character. The Smart car fits a particular owner. Nobody (at least nobody in their right mind) buys one to drive from Phoenix to LA! They buy one to run around town, where small size, maneuverability and low gas milage are much more important.

I’ve been complaining for years that Detroit is not building interesting cars that “just folks” can afford. Yes the Chrysler Crossfire and the Chevrolet Corvette are cool, but out of the price range for most of us. The 57 Chevy or Ford looked cool and were affordable for most people. You could also seat 6 adults in the thing.

Most of the econo-boxes look the same except for minor details. They also only seat two in the front, and two kids in the back or two very cramped adults. You can’t convince me that Detroit, if they’re as smart as they claim, can’t build a six seater with individuality that meets the safety, emission, and gas regulations for the same price as the stuff they’re putting out now.

Yes, they may have to settle for one or two percent less profit. Right now the choice seems to be between slightly lower profit and being out of business!

Friday, January 9, 2009

This time the recession is different

In listening to the talking heads sprout about the current “recession” I keep hearing references to past economic downturns. It seems that no one wants to understand that this recession is different in scale and kind from all others.

First, the book title “The World is Flat” wasn’t just a book title. It truly described how connected our world is and how different it is from what went before. Second, in all previous recessions the jobs came back, this time they won’t!

Big talk for a small personal blog ain’t it?

This recession is different in scale because of the connectivity of global finance. Because the slow sale of toys in New Jersey causes a factory in China to stop production. In all the other recessions a down turn in one country only had a marginal effect in another. This time it’s true, if the United States catches cold, a country half way around the world will sneeze.

Jobs that are lost to this recession will be in finance, manufacturing, and industries that support them. Business in India, Thailand, China and other countries now have the capacity to compete directly with business in the US and at lower wage scales. Part of this recovery will be shifting work to those cheaper locations with the corresponding loss of income in the US.

We must figure out how to support our out of work while we fit them for the new jobs that we still have to figure out how to create. Pretending that workers who invested in educating themselves for the jobs they just lost can predict what they need to do to find a new job when the economic experts can’t answer the same questions just plain dumb.

The people loosing their jobs did the best they could with the advice our teachers, our media, and our government gave then I think all those advisers have an obligation to do their homework and tell those out of work people what new direction they should follow. And if you think it’s not the government’s business, it was the government that was bragging only a few short years ago that allowing those jobs to migrate “off shore” was a good thing and would create jobs.

Now it’s time for the government to show the workers where those jobs are!

Sunday, January 4, 2009

Up side of store closings.

I found this article on about the expected closing of a lot of big retail stores due to the economy.

Two things struck me.

First that as these big stores close they open the way for the small retailers to fill the gap. Second their suggestion that we will by less may also mean that we will spread our buying over time. Instead of a big slug of back to school buying in August, the same money may be spread out over the school year. Back in the day, my parents used to buy a years worth of shirts and slacks for me to wear to school, enough notebooks and pens and pencils, etc. for the whole year.

I suspect that instead of retailers facing those boom-bust cycles, the buying will now be spread more evenly throughout the school year. I also suspect that a lot more people will buy on line, not for any cost savings (my experience is that the shipping costs eat up most of the perceived savings) but because they can get the shirt in blue with stripes that the local store isn’t carrying due to “down sizing”.