Once again we see
The end result of placing profits before people.
Detroit Flails in Latest Effort to Reinvent Itself
Despite insisting all this year that they had solutions to their financial struggles well in hand, both the Ford Motor Company and the Chrysler Group conceded Friday that the steps they had taken were not working and that more bad news was coming in one of the deepest auto industry crises in Detroit's history.
Ford, which has held second place behind G.M. for 70 years, admitted for the first time that it would inevitably be ceding that spot to Toyota because of slumping sales and its decision Friday to close more factories and cut thousands of additional jobs. It also said it did not expect to make a profit in North America until 2009.[snip]
Normally I rail against those who would `oversimplify' a complex issue but, at the end of the day, what we're seeing here is the end result of a classic case of shortsightedness.
It's not the workers who make these decisions; it's management.
"All the old rules of the game are gone," said Mr. Womack, co-founder of the Lean Enterprise Institute. And, he said, the challenge is now to play by the new rules, as dictated by foreign competitors. "We're now in the reinvention phase," he added.
That includes more cuts that will continue at least through the end of the decade. Detroit companies will be focused on closing plants, eliminating blue- and white-collar jobs, and cutting more deeply into their operations to reduce costs. Moreover, the automakers remain liable for billions of dollars in health care costs, both for their active and retired workers.
Once again good citizen we see the workers and the high cost of healthcare being blamed for what, in essence, is Detroit's failure to produce products the public wants at a price it can afford...a.k.a. value.
Hanging in the balance here is the question of whether or not autoworkers are being `overpaid' or, what is more likely the case, is everyone else being underpaid?
One can only wonder if Detroit would be singing the blues if the average worker's wages were more in line with those paid by the auto industry...
As you ponder this let's segue into some more economic `happy talk' regarding the CPI...
Price Index Moderated in August
A month ago the economy seemed to be in dire straits -- wedged in by the inflationary pressures of soaring energy prices and rising labor costs while threatened by the prospect that the weak housing market would decimate consumer spending.
But yesterday, the government reported that consumer prices rose only 0.2 percent in August, pushing annual inflation to 3.8 percent, the lowest since April. Meanwhile, retail sales rose by a respectable rate of 0.2 percent in August. And in September, consumers' confidence about the future increased sharply.
Ignoring the growing trade imbalance, why do you suppose consumer purchases [retail sales] rose by the SAME AMOUNT as the increase in the inflation rate?
Can you say `Back to School'?
Then there is the `sharp' increase in `consumer confidence...
The changes largely reflected declining gasoline prices, which not only dragged down inflation but also left consumers with more money.
How much do you want to bet that the price of energy will resume its upward march right after the mid-term elections?
For a while there it seemed as though every time someone sneezed in the Middle East the price of oil jumped a buck a barrel...now, curiously, no matter what bad news we hear, the price of a barrel of oil continues to drop.
And all you can do is wonder why?
Although those who call the shots make no bones about how stupid they think we are.
The economy has slackened, slowed by higher interest rates and a weakening housing market. Yet despite slower growth, energy prices continued to push inflation higher. Wages, which have inched up consistently over the last year, have threatened to put additional pressure on prices.
Indeed, the index of core prices, the gauge most closely watched by the Fed, which excludes the unstable prices of food and energy to provide an indication of underlying inflation, rose 2.8 percent in August compared with the year before, the fastest annual pace since November 2001.
Naturally, it is the `unstable' price of food and energy that is throwing everyone's budget out of whack, excluding these, the inflation index still climbed to 2.8% for the year...guess you need to read the whole article to see the how `glib' the title really is.
And many economists suspect that home prices are still likely to fall more steeply. This could decimate residential construction. And it could impair American consumers' ability to borrow and, therefore, to spend.
"There's a storm building there," said Dean Baker, co-director of the Center for Economic Policy Research in Washington.
But if so, it is further away on the horizon.
No one is more amazed than me the economy hasn't `crashed'. That said, this article points to how unstable the situation is and how we continue to experience what's been called a `rolling recession', a recovery in some sectors but not others.
Herein, good citizen, lies the danger. The media continues to emphasize meager economic strength while ignoring dire fundamental flaws.
There is a term for this and it is called `gradualism'.
For the past thirty years our standard of living has been slowly deteriorating, the nation wasting away while the media focuses on economic happy talk that has nothing to do with how much harder the average worker has to run just to keep from going under...
So it is we come to our final piece More `happy talk' about how America has `failed' to maintain the lead in education...
Editorial
Killing Off the American Future
Published: September 16, 2006
America's domination of the global information economy did not come about by accident. It flowed directly from policies that allowed the largest generation in the nation's history broad access to a first-rate college education regardless of ability to pay. By subsidizing public universities to keep tuition low, and providing federal tuition aid to poor and working-class students, this country vaulted tens of millions of people into the middle class while building the best-educated work force in the world.
I call this `happy talk' because the editorialist neglects to include a timeline, a point of reference to back up their claim. Once again, are we talking thirty years ago?
When judged in terms of college affordability, 43 American states are given F's in the new report. In addition to disinvesting in higher education, the states -- and the colleges themselves -- have shifted aid once aimed at the poor students to the middle and upper income levels. They are essentially following the lead of the federal government, which has adopted the same strategy, while failing to sustain its commitment to poor students who once could have attended college on the Pell Grant program alone.
Unless America renews its commitment to the higher education policies that made the country great, we could soon find ourselves at the mercy of an increasingly competitive global economy. And if we let ourselves hit bottom, it could take generations for us to dig ourselves out.
If you click on the link it is obvious that the writer is referring to the `Boomer' generation. This is all well and good but the writer also neglects to take into account the changing landscape, the dearth of jobs for those who do make the sacrifice to attain a college degree.
As many readers here will attest, obtaining a college degree is no longer a ticket to a middle-class income. In today's shifting employment landscape there is no safe haven, no `secure' jobs.
While the auto industry is but one piece of a much larger puzzle, it is a crucial piece that reflects the overall state of the economy. Like energy and communications, transportation is part of our modern lifestyle
Why is our transportation industry dying?
Could the answer lie in profits before people?
The consumer price index is `moderating'...they hope.
Then there is the education/job conundrum...what skill requires higher education that can't be done over a wire...or worse, will no longer be done here because people can't afford it.
When a majority of us are earning third world wages many of the things we take for granted like first rate healthcare and quality education will become dim memories...
All so a few can be rich.
Don't let them win.
Thanks for letting me inside your head,
Gegner