by Tanada » Sun 05 Apr 2009, 08:19:23
$this->bbcode_second_pass_quote('Revi', 'I') agree that Detroit is just the first city to go down among many. The big industry, car making is turning out to be something that we don't need any more. We only have demand for 7 million vehicles, and we have capacity to build 10 million or more. Who wants anything that they are turning out in Detroit any more? It's hard to buy a car from a company that's called general motors. There will be people selling cars, but nothing like it was in the 20th century. It's all over now.
Its the same with all of the formerly great American industries, during WW II we built up our industrial base to compensate for the loss of European and Asian production. We had the most ship building capacity, we had the most overall manufacturing capacity, steel refining and milling, you name it we had it because everyone else got bombed out during the war.
After the war we were supplying everyone, but at the same time we were rebuilding the manufactories in Japan and Europe so that they could 'get back on their feet' with the Marshall plan.
By the 1960's we were using 1930's and 1940's factories in the USA to compete with the 1950's and 1960's factories and facilities in Japan and Europe. When South Korea started building ships after the Korean war nobody took it seriously. By the 1970's shipyards in the USA were shutting down all over the place. Now we are down to a handfull of ship yards in the USA and most ships are built in Asia.
During the 1980's there was a huge stink because European steel was cheaper in the USA than steel made here from ore mined here. Michigan, Wisconsin and Minnesotta had some of the most productive mines on earth for iron ore, almost all of them are closed now not because they lack minable ore but because demand has been offset by ore mined in other regions by other countries. If you are importing finished steel and making up the difference by recycling scrap steel you don't need to mine much in the way of ore to offset your losses.
Of course all of this was only possible by global free trade. The USA has been the biggest promoter of Free Trade you could ever want. When other governments subsidized their industry to make exports to the USA profitible we never batted an eye, because the polliticians told us it was better for consumers to have cheap stuff from overseas than to manufacture it ourselves.
They forgot something, to be a consumer you need an income greater than your basic needs. Working in manufacturing is how Americans used to acheive that abillity to be consumers. When America was an agrarian culture we were not mass consumers. As the manufacturing jobs went away the less well educated average people have been squeezed out of the mass consumption lifestyle. You only need a few bankers/brokers/lawyers in any society. The mass consumption lifestyle can not be sustained on a service oriented worker base, they do not have enough excess buying capacity because their jobs are not that great of a value added effect.
Now that cheap energy is going away due to peaking effects credit is going away as well. No credit and low pay equals low consumption. Low consumption equals paradigm shift in how Western Europe and the USA/Canada live. It also means production world wide will have to drop significantly, no reason to build what can not be sold.
/rant