Where do we go from here?

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I was having a casual conversation with Brian about this the other day, and I didn't think much about it when I said it, but I can't stop thinking about it, so I'll throw it out to everyone who reads this horrible blog...

(click link to finish reading - it's a long one...)

The United States pretty much became a super power because of our ability to build things -- the Industrial Revolution, if you will. Our country grew rapidly from the ranks because we organized our workforces, designed advanced equipment, and built it.

We hired engineers. We hired laborers. We hired transportation specialists. As a result, factories and offices needed to be built, and that created jobs for more people (builders, office folk, architects, crane operators, electricians, plumbers, etc). Eventually, our country was rockin' and rollin'.... and then WWI started, and after it was over, we sunk into a depression.

WWII started, and our industrious capabilities were called upon again. Everyone worked hard, more jobs were created, and we won the war. After the war, our economy (and industriousness) really took off. Technology, engineering, manufacturing, etc. all took off by massive leaps and bounds. People made money. The dollar was strong. Houses appreciated. Cars were plentiful and cheap.

One 1965 dollar is worth roughly $6.15 dollars today (depending on whose calculator you use). A car cost $1500 back in 1965... that's roughly $9200 in 2005 dollars. The median income was $7200, or $44,251 in today's dollars.

So, a car represented about 21% of the average annual income.

Now, we outsource everything. More than 70% of the items sold in the United States come from outside sources. If Wal-Mart (aka "the devil") were its own country, it would be the third largest importer of goods from China.

We've become so obsessed with "saving a nickel" on everything that we've lost track of where we'll get those nickels from in a few years. I mean, if we outsource all of our "call centers," computer builders, electronic components, everyday goods (think anything you buy at Wal-Mart/Target/whatever), car parts, stereo equipment, clothing, etc., what will be build here in the US?

The very basis of our success is being shipped out to other countries, where folks will answer a phone or build a camera for $1 a day. And yet, things cost a lot more than they used to... The averge cost of a new car today is $20,430, or $3300 in 1965 dollars... And the median income in America today is just over $30,000 per year.

What are we going to do? What's the solution?

One final example of how bad things are getting. Microsoft is outsourcing a majority of its work to places like India. It claims it can save $100 million per year by doing so. That sounds *awfully* high to me, but I could be wrong. In any event, let's say they do save $100mm per year by doing so...

At last count, Micro$oft had $38-billion in cash reserves on hand -- or 380 YEARS worth of payroll at $100 million per year.

Do you really need to save that much money at the expense of costing US residents jobs? Eventually, Haji and Sanji -- I'm sorry -- "Jeff" and "Tom" from India will have all of our IT jobs (You can't call Dell, Earthlink, eBay, Microsoft, or half-a-dozen other major companies and speak to someone from America any more). Ting and Ming will have all of our production jobs. And what will we have?

I just don't get it.... How will the government tax its citizens when its citizens don't have jobs? How much more can our government "borrow" to make up for what its lost due to all of the outsourcing and recent problems we've suffered?

And people are shocked when I say I don't want to bring kids in to this awful world - look at what they've got to look forward to...

And I blame unions for a lot of our problems - GM/Ford/Chrysler can't make any money because they're burdened with billions of dollars in retirement costs (pensions, health care, etc). As a result, their products suffer because they have to maintain a higher profit margin, and in turn, people don't buy their products because they're (a) pricey, (b) generally of lower quality*, and (c) less technologically advanced than those of its foreign competitors, many of whom don't pay pensions, and don't pay retirement costs.

Unions may have been a good idea, but they've been poorly executed. And speaking of execution, if we don't get a handle on our health care costs, we're all toast -- it's ridiculous how expensive basic health care is. Government intervention isn't the solution -- ever been to the DMV? Imagine the lines at your government-run health care center...

So, what's the solution? What do we do? If we're not careful, we may become a suburb of China... or India... hope y'all like noodles, curry, and communism. Well, maybe not us, but better hope your kids have an open mind toward other countries ideals, because I smell disaster.

*I think the quality of American cars is on par with those of foreign offerings. We've had zero (0) problems with our Tahoe, while the Element has already had a check engine light come on, and an odd/annoying "check fuel cap" warning problem, even though the cap and vent hoses are fine... it also has more rattles than the Tahoe, but I still love it. :-)

4 Comments

Hey, now even blogs are being outsourced. (this is a pretty interesting blog - I'm pretty sure it's a joke blog but you never know) http://blogoriented.com/?p=4

You got it right; the UNIONS are a major source of the Manufacturing issues in this country. It's sad to live in a country were a fork lift driver can earn more than the engineer developing the product. Don't get me wrong the fork lift driver probably put a lot of time into his job, but the fact of the matter is, that job is not a $50k a year job. There was a time and place in this country when the UNIONS were necessary, when the working man didn't have a voice, when the employee could be taken advantage of, but that's not the case anymore.
The extreme is where the UNIONS have truly run amok in the school system. This is an area were the UNIONS skim the money that us taxpayers pay for teachers and kids, and use that money to pad there incomes and pay for advertising that “the teachers are under paid,” truly sad.
Capitalism is the great equalizer. If it is not profitable to produce the product in the U.S. the product should be produced elsewhere (say that three times)! It’s harsh to say, but it’s true. With time the Global Economy will equalize, it will not happen overnight, but it will happen. In conjunction with Democracy and as much as I hate it the “MASS MEDIA”, or I will say the spread of information developing countries will be empowered to demand more. More Money, More Power, More FREEDOM.
This will be a long process that will affect the U.S. Worker more that anyone else, but if we ask the government to intervene we will take one more step to the left, to communism.

p.s. I like your theater!

I totally agree, Jed. It seems like so many of the "powers that be" in this country speak loudly about how they're "looking out for us," yet at the same time, they're the union leaders and the CEOs of companies that are bilking us and/or sending our jobs overseas.

I have to laugh, because a big issue in our state is "illegal immigrants." People here complain loudly and daily about "all them damn Mexicans," and I just laugh, because while it's true there are plenty of illegal aliens here, the Mexicans are the least of our worries. It's the Wal-Marts, Dells, Microsofts, and other big companies that hire foreigners to do jobs for pennies on the dollar, all the while charging us considerably more and paying us considerably less than they used to.

These "leaders" are the ones skimming money from people who are forced to pay Union dues, bilking the system, its employees, its consumers, and ultimately our country. I wish like nothing else that rather than persuing "terrorists" overseas that we'd go after the terrorists that reside in our country and head-up antiquated and exploited systems that are long overdue for a major overhaul.

I seriously wonder what's going to happen in 10 years when our jobs are overseas and we're buying most of our goods from places like China. We can wear the American flag as proudly as we want to, but if things keep going the way they are, we may need to literally wear that flag home, because it's all we'll have left.

Great to hear from you, and I hope all's well with you. Stop down some time and I'll put a movie on for you. :-)

One solution is to outsource upper management. The average 3rd world uneducated peon could do just as good of job as CEO of any of these major companies. They'd probably be much more honest and actually have concern for their workers. Furthermore they would work for about $1 per day.

The fachist running the corporate borg ship I work for makes tens of millions of dollars each year and is running this place into the ground.

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