Re: Market Whistles Past the Graveyard.

["Gary Santos" <evs@xxxxxxxxxxx>]

In a way, we should not be surprised that all this is happening.
Globalization and trade liberalization did not start with the WTO. It has
its roots, as far as I can tell, way back to GATT and the "lessons" learned
from the 1930's.  It is just that heavy pressure from the WTO, sustainable
growth economics (ironically) and the end to the Cold War brought about
change at such a pace that dislocations are to be expected. The Austrians
would say, well, let the adjustment begin and the faster it comes the
better. The Keynesians would have a different opinion, of course. (And, am I
correct, historically speaking, that the ascendancy of Japan as the gurus of
management and production in the 1980's was met by America investing in
China?)

Having said that, I seem to recall reading that Veblen once said that we are
all subject to experiments by some well connected social scientist
scribbling in the background... or something to that effect. I submit that
we have come or are coming full circle back to the 1930's and that we will
need another revolutionary thinker to bring us out of the coming mess.

Fiscal Discipline. Reordering Public Expenditure Priorities. Tax reform.
Financial Liberalization. Competitive Exchange Rates. Trade Liberalization.
Liberalization of Inward Foreign Direct Investment. Privatization.
Deregulation. Property Rights. (From a paper by Williamson entitled "Did the
Washington Consensus Fail?) This enumeration policy action was considered as
cannonical in 1989 and probably still is cannonical in most corners of the
world. Before that, I believe, Industrialization by Big Government (the
precursor to Privatization), Protectionism and Import Substitution were the
buzz words for, at least, some countries. I am old enough to remember these
policies and handled some loans gone sour resulting from these policies.

I mean, we are all a product of the times and those times have been
Keynesian and Monetaristic, those times have been themed by Modernism and
Materialism.

I now wonder if economic thinking has ever produced something that resembles
an Economics of  Charity where the driving force is not the economic
survival of the fittest and where, to quote Spock, the good of the many
outweigh the good of the one. I was also thinking, given the enumeration of
John below and bringing it to another level, maybe sometime in the
aftermath, someone will come out with a doctoral thesis entitled "Karma in
Economics". Then, maybe, the development of an economics based on charity
will have a chance.


----- Original Message -----
From: "John W Perry" <perry@xxxxxxxxxxxxxxxxxxxxxxx>
To: <longwaves@xxxxxxxxxxxxxxxx>
Sent: Wednesday, January 15, 2003 8:32 AM
Subject: Market Whistles Past the Graveyard.


>
> K-mart laying off 35,000.  As the question has been all along:
> is this prelude or prologue?  I say it's prelude.  My reasons
> are the following by sector:
>
>
>    1) Software -- the process of offshoring programming to India is
>       well under way.  Programming in the U.S. is *not* going to be
>       a source of job creation.
>
>    2) Engineering R&D -- it's happening in Germany and Switzerland but
>       not much here.  Companies with large R&D arms like IBM are becoming
>       rare exceptions but certainly NOT the rule.
>
>    3) Steel and other base metals -- Japan makes better steel cheaper.
>       Mining operations in places like Indonesia will result in a lot
>       of base metals coming from there, not here.
>
>    4) Oil.  Sad fact -- the U.S. DOESN'T HAVE MUCH OIL.  Many rigs are
>       just flat dry and you cannot milk blood out of a stone.  If there
>       is to be a national energy policy that doesn't involve stealing
>       the oil from Iraq, Afghanistan, etc. -- it has to be hydrogen fuel
>       cells (an overbuilt technology in the U.S. already) or solar.
>
>    5) Consumer electronics.  Do I *really* need to point out that Samsung,
>       Sanyo, etc. are kicking our ass here?
>
>    6) Appliances.  See point #5.
>
> This is why risk takers would do well to take a position in, say, a
> reverse S&P index fund like Rydex Ursa.  What we are witnessing is the
> offshoring of an entire economy.  Part of it is cheap labor.  But that
> is the easy part of the explanation.  Common laborers in Japan and Korea
> are *better educated* and have a *better work ethic* than most Americans.
> The bottom strata of the economies of our competitors are smarter and have
> a greater commitment to duty.
>
> Moreover, those heavy labor jobs, like steelmaking, that have been
offshored
> give laborers a sense of satisfaction that they've been useful and made
useful
> stuff.  What satisfaction do you get from a day's work in a high tech
company,
> a financial-services company, a medical services company, etc..  Jobs that
> are all paper-pushing create existential crises of meaning and we are only
> deluding ourselves if we think such crises only occur in people with IQs
> above 150.
>
> When the common man feels useless and adrift, this creates increasing
boredom,
> incivility, and perversity in a society.  Here we are with 200 satellite
> channels, infinite web download goodies, and so on but this is just a
> symptom of a hunger to feel alive.  Obviously, it fails to produce
anything
> but numbness -- numbness as an antidote to purposelessness.
>
>
> John Perry
>
>