An article was out today in the times titled "In Recession, Americans Doing More, Buying Less "
In an earlier Diary "Does this Look Like the Start of a Lost Decade? by k charles weeda"
Both interested me a great deal, and my comment was well longer than normal so I am going to try to answer some of the questions in this diary.
More
the article itself was sophomoric and incomplete, it appeared to be designed to inspire fear in stead of solution, covered in a fluff piece about a canoe.
Our economy and by default the economy of the world has been built on a series of complex Supply Chains designed to feed the consumerism of the baby boomers. Everyone made money because of the commodities that were being traded in that Supply Chain.
Ex (very small representative actually)
Computers, flat panel monitor, raw materials for the diodes, raw material for the plastic, and elelctronics, I won't bore you with what each element is, but instead tell you they were and are expensive.
and for each commodity there was :
Originator (mine, manufacturer)
Broker (Trader per commodity)
Broker 2 (Trader per end product)
Re Builder (or manufacturer # 2)
Broker (by completed piece)
Clearing House for bulk sales (Wholesaler)
Corporate Buyer
Sales Team
Marketing team
Retail
Consumer
This is not a complete Supply Chain however it will do the trick to get my point across.
in the process of Buying a used canoe. None of those people in the supply chain get paid. And Getting everyone paid is the trick.
this is why bailing out banks is a failure, they are lending money back into the old supply Chain to revive it, money makes it into the corporate supply chain, and the commodities are being bought. But the consumer is not buying. Broken Supply Chain.
In that simplistic supply chain of mine are 6 Corporations, of those 6, 5 are Fortune 500's now. So they need to demonstrate to Wall street profits, preferably double digit profits.
Buying a used canoe> None of those people in the supply chain get paid. And Getting everyone paid is the trick.
this is why bailing out banks is a failure, no money makes it into the corporate supply chain, and the money is simply a wasted effort.
In that simplistic supply chain of mine are 6 Corporations, of those 6, 5 are Fortune 500's now. So they need to demonstrate to Wall street profits, preferably double digit profits.
Sould the american public choose to buy used, and not new, that whole model falls apart. There is of course a used Supply chain but it is much smaller, and the secondary market has a much lower value.
There is a secondary market as well, the broker run used cars/equipment are the commodities that falls into this segment. Much smaller, and the secondary market has a much lower value. meaning lower pay
There is a tertiary market as well, Criags list falls into this segment.
There are answers to this, bu there has to be a major shift in our Supply Chains, and corporate America needs a pass from Wall Street for probably 2 - 3 years. Mo One will suggest this to the Pres. NO ONE a grace period where Wall street doe NOT Devalue the stock price as the company recovers from this disaster.
We need to shift the supply chain and pare it down in the big corporation. Stop letting them tell the manufacturer where to get it's raw materials, STOP letting them build mega agreements greasing everyone's palm but the consumer and the government consumer.
this would curb some of the globalization, and drive prices to a more realistic level, less middle men and all that.
It scares me that most people I talk to can not see how the recovery could and should happen. It really scares me that we the American public as a whole do no know how the meat for to our plate.
One of the Masters level SC Experts will come in here now and dissect what I am saying.
But it really does boil down to this:
Either we put the stimulus money in the hand of the consumers, and allow them to perpetuate the old system and revive it,
or
we develop a more synergistic Supply Chain, with common good designed in. (oops that is what for me fired)
It is the Supply Chain, and each step that is omitted means jobs, lost jobs. So to the consumer it will be a lost decade, in Corporate America it is a restructuring time