America’s Has-Been Economy

Chronicles ^ | Friday, March 18, 2005 | Paul Craig Roberts

[SamAdams76]

I was with you up until that. Isn't that a bit of an exaggeration? Most families can spend $100 at chain restaurants several times a week?

Well they obviously do. Everytime I go to one of these places, they are absolutely mobbed and unless you call ahead, you are waiting for a table for up to an hour. The waitstaff are usually friendly but they are dreadfully overworked as these places are often understaffed (they all have HELP WANTED signs at the door).

I took five people to the restaurant last night...

Five entrees with an average cost of $13 = ($65)
Two appetizers = ($12)
Four margaritas (between three adults) at five dollars each and four softdrinks between the two kids at two dollars each = $28
Desserts (three of us declined) = $8

Total tab was about $113. Add $25 tip (service was excellent) and it was $138 total.

This is not a pricy restaurant but it adds up fast. This place was an absolute madhouse however. People were literally out the door waiting to get in. We had to park in the next parking lot over. We waited nearly an hour for our table. This scene was repeated hundreds and hundreds of times in just about every other eatery in the metro Boston area. EVERY TIME we go out to eat on a weekend night, it is a total mob scene at every place we decide to go.

I guess the point I'm trying to make here is that an enormous amount of families can afford to go out to eat often and they are spending big, big money to do so.

This is not what would be happening if our economy, as is being argued here, is going down the toilet.

[jschald]

"What field would you recommend to the students?
Walmart Greeter, Walmart Cashier, Walmart Stockboy."

lol. that's where we are headed.

[FreedomSurge]

Why not Spanish or Chinese?

Few in America are able to write coherently.

[billybudd]

English degree doesn't equal "English jobs." It just means good communication skills, which is more valuable today than any particular skillset.

[FreedomPoster]

>> Those cars are manufactured here using exclusively foreign made parts, except maybe for the bodies.

Making it up as you go along? For example, I know Honda has a large engine facility here, and I think Toyota does, as well. And here is a press release about their new transmission plant in GA.

I'd suggest getting informed rather than making easily demonstrably false posts.

http://world.honda.com/news/2004/c041109_b.html

In Georgia, Honda will invest US$ 100 million to construct its 13th major plant in North America, a new 250,000 square foot plant that will begin assembly of automatic transmissions in fall 2006. At full capacity, the plant will employ 400 associates and produce 300,000 transmissions per year. Reflecting Honda’s strategy to base powertrain production near vehicle production for synchronous assembly, the plant will initially support production of Honda Odyssey minivans and Pilot SUVs at Honda Manufacturing of Alabama, LLC (HMA) in Lincoln, Ala., 60 miles west of the Tallapoosa plant.

In Ohio, Honda will invest US$ 100 million and add 100 new jobs to expand Honda Transmission Mfg. of America, Inc., (HTM) in a move that will result in the transfer of the value-added production of high precision gears from Japan to Ohio. As the new Georgia plant begins production, HTM will gradually shift responsibility for transmission production for the Alabama plant to the new Georgia plant and phase-in the new responsibility for gear production. The expansion will increase HTM’s capital investment to more than US$ 261 million, employment to 900 associates and plant size from the existing 361,000 square feet to 631,000 square feet.

In Alabama, HMA will invest US$ 70 million and add 100 new jobs to begin machining additional engine components at its existing engine plant operations. These components are currently supplied by Honda of America Mfg.’s Anna Engine Plant in Ohio and Honda’s Mohka Plant in Japan. HMA began operations in 2001 and, today, has the capacity to produce 300,000 vehicles and V6 engines per year. HMA’s total investment exceeds US$ 1 billion.

Honda currently has an annual production capacity of one million automatic transmissions in the U.S. and has assembled more than nine million transmissions in America since it began producing automatic transmissions at Honda of America Mfg.’s Anna, Ohio, Engine Plant in 1989. HTM assumed responsibility for transmission production in 1996.

And here's a good summary link that discusses auto engine plants, and other Honda vehicle plants, in the U.S. and North America.

http://www.hondanews.com/CatID1020?mid=20010212001257&mime=asc

[WilliamofCarmichael]

RE: "We could make the USA business friendly again"

What you said is true.

But, I hope without sounding confrontational, I ask on this thread a question I've asked many times before.

How come we benefit from foreign companies being outsourced to us? They set up here, hire tens of thousands of Americans, make goods, sell goods to Americans, operate under the same government, some have unions --- I don't get it.

Many American companies, et al. say it's not possible. Production has to be outsourced offshore and the goods imported and sold to Americans else the corporations cannot be competitive.

[A. Pole]

I guess the point I'm trying to make here is that an enormous amount of families can afford to go out to eat often and they are spending big, big money to do so.

What percentage of the families can afford it? During the Great Depression more than 70% of workers were employed, the people with money were getting good bargains and New York fancy restaurants had waiting lines.

[traumer]

"I recommend something flexible and useful, like English..."
HA !

Can't just train in one specialization anymore and expect it to last your whole life. ADD Spanish !!

[FreedomPoster]

Very few English majors today graduate with critical thinking skills worthy of the name. Most are only able to regurgitate the Leftist/Marxist/Feminist party line.

Communications skills without critical thinking skills are worthless. For a communications-intensive position, I'd rather develop a C-student engineering or accounting or finance major, with good Verbal SAT scores, than try to teach critical thinking to an English major.

[phelanw]

Meanwhile, GM corporate bonds are rated BBB-, one step ahead of junk bond status. GM makes little money producing and selling cars anymore, it makes part of its money financing their sale, and believe it or not, it makes a good portion of its money financing real estate purchases. But as the Fed continues its interest rate hikes, and as the bubble in real estate pops, there will be fewer and fewer purchases of real estate to finance. I have heard some analysts talking openly about GM's impending bankruptcy. Look at a chart of GM's stock, or for that matter, look at Ford's. Then look at Daimler or Honda or Audi or Toyota or Nissan stock. What does that tell you about the future of American jobs? Ask someone from Detroit what is happening with GM subcontractors there.

Meanwhile, oil and copper prices are at historic highs, and the other natural resource products are increasing in price rapidly. The Japanese just renegotiated with their iron suppliers prices that were 75% higher, if my memory serves. An electrician friend told me copper wire prices have doubled since the summer.

Meanwhile, the government pumps up our confidence with phony economic numbers. The commerce department now uses "hedonics" in its reports. Those are phony made up numbers to make it look like the economy is growing faster than it really is. The government uses a birth-death model when reporting job growth, that basically creates imaginary jobs. All this information is public and easy to find.

[balrog666]

Exactly. The problem with the US business model is it has become obsessed with quarter to quarter performance, and this has harmed the long term performance of many US based companies from Union Pacific Railroad, to GM to HP. There has to be a change in the very corporate culture of US companies, or the bad long term implications of this system will come home to roost from a "health security" payroll tax down the road enough new rules and regulations to make even the Carter era seem quaint by comparison when the US electorate has no more economic ground to give, votes in those people who promise to ease their economic burden.

The volatility and uncertainty in federal and state tax law, environmental and workplace regulation, and frivolous (but economically life-threatening) lawsuits make planning for the long term a rather meaningless exercise. Thanks, Congress.

[mighty_abandon]

The problem with america right now is the hyper-consumerism that we all take part in. A lot of the $100-spending families are using credit to pay for their restaurant bills, and they are paying interest every month to the credit card companies, since they don't actually have the money to pay the bills right off. It seems that the goal in many of our lives is to amass goods or consume, and to buy buy buy (new cars, jewelry, electronics, etc)

I don't think the fact that our restaurants are overcrowded is evidence that we enjoy a robust and healthy economy. Instead, I think it is a indicator that we can't control ourselves in today's hyper-spending hyper-consuming world. And that boils down to Americans going bankrupt, especially as interest rates keep rising, and as a result the state of America's collective checkbook showing a deeper and deeper hue of red.

[FreedomPoster]

The American manufacturers don't make many products in that arena, that others want, is my take on things. Fuel economy is a big issue, as is design, build quality, and reliability. Cadillac is making big strides, and Ford is trying with the new 500. What do we have that would appeal in Europe or South America? Think about that, and I think you'll see the issue.

[billybudd]

Hehe, good one!

[traumer]

"... to pay for the healthcare of people that have been retired for years. Current employees okay but retirees, no way "

Wooo-Hooo ! Yes - just let them die...
It will solve the social security enigma too.

[NoControllingLegalAuthority]

In a pure capitalist free market, Americans would have their tanks, ships and fighter aircraft built in China by workers who can do the work a lot cheaper.

Does that make sense?

If all manufacturing is off-shore, how do we protect our shore?

A country that makes nothing IS nothing.

[WilliamofCarmichael]

I was remiss in not making my question less specific to competition among autos.

In general, how can foreigners outsource to us and make it here by manufacturing and selling here? As I noted above many here seem to be saying that it cannot be done well enough to stay in business. Of course, many American corporations do quite well, thank you. But a lot say it cannot be done, it seems.

[WilliamofCarmichael]

RE: "Yes - just let them [non-productive coots] die"

I think the proper Terry term is "release." Release them.

As former Colorado governor Lamm said, it is the duty of old people to die and get out of the way. Mr. Lamm is now ten or fifteen years older and I do not know if he still feeeeeeeeels that he should be released.

[SamAdams76]

During the Great Depression more than 70% of workers were employed, the people with money were getting good bargains and New York fancy restaurants had waiting lines.

Maybe so but do you seriously think we are mired in another Great Depression today?

[SamAdams76]

Well speaking for myself, my credit card balances are zero. That is how I justify going out to eat like I do. If others are financing their restaurant meals on credit, then shame on them. It will catch up to them eventually.