Archive for September, 2008

Financial Crisis or Opportunity?

Tuesday, September 30th, 2008

By David L. Brown

The financial “meltdown” that is taking place is very strange in several ways. For one, why now? Why just now as the Presidential campaign enters its critical last few weeks? I would hate to think that Sec. Paulson and Fed Chairman Bernanke pulled all this off just to try to swing the election one way or another. I am sure they did not. But still, the timing is curious so I think we might look further. Who would benefit?

Let’s review what is really happening. There have been runs on banks, at least one of which was triggered by unwise statements by the senior Senator from New York. Twelve days after Sen. Schumer wrote a letter to bank regulators suggesting that the IndyMac bank might be on shaky ground, a letter that he then made public, a run of withdrawals forced the bank to be shut down by the government. According to a report on the National Public Radio web site, here is what happened:

In the two weeks after Schumer’s warning, anxious IndyMac depositors withdrew $1.3 billion. Regulators suggested the senator was partly to blame for the bank’s collapse.

“In effect, the deposit run sparked by the senator’s letter pushed IndyMac over the edge,” said Office of Thrift Supervision Director John Reich after the bank was seized. “Would the institution have failed without the deposit run? We’ll never know the answer to that question. It’s true that IndyMac was already a troubled institution in precarious condition. The deposit run precluded the possibility of IndyMac recovering from this condition.”

That all happened back in July, after the primaries had determined that Obama and McCain would be the candidates for President. So we have a Democratic Senator “partly to blame” for a bank collapse just as the campaign started to gain momentum. Coincidence? Perhaps. But consider that the left had been crying poverty about our economy for months, and with obvious political motivation.

The failure of one bank would have been bad enough, but the collapse of IndyMac started a train in motion that led investors and depositors to become increasingly wary. Meanwhile, the left with the enthusiastic support of a liberal and perhaps even unbalanced press revved up their scare tactics, acting like the witches in MacBeth, toiling over their cauldron trying to stir up economic trouble for our nation. Boil, boil, boil — you couldn’t turn on a TV or radio without hearing some motormouth declaring that we are “Dooooomed, Doomed I say,” and most usually without any particular reasons. For months the left has been claiming that we are in a recession, nay, a depression, nay again, a New Great Depression, the Depression to End All Depressions. The sky is falling!

And meanwhile, the American economy was still growing, unemployment was at reasonable levels, our trade balance was beginning to swing in our favor. There was no sound reason for Chicken Little and all his cronies to be shouting warnings from the rooftops.

No sound reason, but I can see an unsound one, and that is the possibility that it was all part of a concerted program aimed at putting a Democrat in the White House for the next four years. Could that be? Yeah, I think so. The behavior of the looney left has been so consistently radical and insane that one could believe almost anything of them. All one needs to do is look at the barrage of manufactured lies, innuendos, and vitriol that has been hurled at Sarah Palin.

Well, if it was their goal to scare Americans into voting for Obama, perhaps they didn’t really mean to burn the whole house down. After all, they wouldn’t want to drive the nation into total collapse. Or would they? I don’t know the answer to that, but the fact is that might be what they have done. The continued drumbeat of negative claims about our economy, the war, how much foreigners hate America, and everything else may finally have shaken people up, shaken them up enough that they reacted to rumors such as Chuck Schumer’s conveniently timed letter by drawing out more than a billion dollars from IndyMac, and others to begin quietly taking money away from other institutions and putting it into a sock.

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Posted in Economics, Essays and Opinion, Politics | 1 Comment »

U.S. Dollar Gains New Image

Tuesday, September 30th, 2008

By David L. Brown

According to our private sources at the Treasury Department, in order to calm world markets by providing a high degree of transparency to the economic situation, the U.S. government is responding to present financial trends by issuing a new one dollar bill, as pictured here:

dollar600x200.jpg

According to reports a new five dollar bill is also coming soon. It will feature Homer Simpson slapping his forehead with balloon text reading “Doh!”

The treasury also has plans to issue three dollar bills, seven dollar bills and 13 dollar bills featuring beloved all-American spokes-characters Wile E. Coyote falling off a cliff, Sylvester the Cat being foiled by Tweety Bird, and the Evil Witch from Sleeping Beauty selling apples on Wall Street to unemployed investment bankers (no extra charge for the poison).

According to Treasury Sec. Henry Paulson, “we decided it’s time to inject a little humor into the situation. People will all be smiling again as they spend money, and that’s what we need right now, more high spirited, mindless spending.”

There are no present plans to redesign larger denomination bills, but it is rumored that with the new $1, $3, $5, $7 and $13 bills now in the pipeline that the penny, nickel, dime, quarter and half-dollar coins will be eliminated. In recognition of racial equality and the right of women to be allotted special privileges, the dollar coin will be replaced with one featuring Michelle Obama giving a middle-finger salute to America.

UPDATE: This news flash from PBS (Particularly Biased Slander) News:

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Posted in Economics, Satire, Irony, and Humor | 2 Comments »

Is It “Game Over” for the Financial Elite?

Monday, September 22nd, 2008

By David L. Brown

On June 6 I wrote an essay titled “Black Friday, a Day to Remember” in which I discussed the fact that oil prices had soared on that date by an astonishing amount. Here is how I began that post:

OK, anyone out there still think there isn’t something serious going on with oil? Today the price of the sticky stuff rose by an incredible $10.74 per barrel, causing the stock market to plunge nearly 400 points.

Wow, an increase of $10.74 in a single day! That had to be a record that would stand, well, maybe forever, right? Well, no, for today it jumped by more than twice that amount at one point, by more than $25 per barrel. Starting from an opening price of $104.55 it touched $130.50 during the trading day and closed at $120.92, up $16.97. That made the Black Friday advance look like spare change.

Again just two days ago I returned to the subject of the importance of petroleum as the foundation of the world economy. In that article, “Economic Troubles Signal Post-Resources Era,” I discussed the on-going transition from a resources-based to a post-resources economy. This is a real phenomenon, not some wacko conspiracy theory. The facts are solid, and they indicate that the Earth is beginning to run out of many of the natural resources on which our economies are based. That applies in particular to oil, but also to many metals, minerals, arable land, food, and almost everything else.

Now when we talk about “running out,” we don’t mean that suddenly the mines and wells and farms will one day suddenly stop producing entirely. What is happening is that available supplies of these resources and commodities are peaking, that the supply can no longer continue to rise in response to growing demand. We have written many times on this subject, in particular to the predictions of M. King Hubbert, an oil geologist who in the 1950s predicted that oil production would rise to a peak, then fall back again in a classic bell curve. Hubbert’s predictions have proven accurate, and today we have almost certainly passed the Oil Peak and are clinging to that peak only through heroic efforts and at substantial and rising cost.

You don’t hear much about it, but in fact a good share of present “oil production” is actually being processed from heavy oil deposits, sour oil, tar sands and other less desirable sources at great monetary and environmental expense. Much of the good refinable petroleum is coming from fields that are in decline, in places like Saudi Arabia, Russia, Mexico and others, or by offshore drilling to tap increasingly deep undersea deposits.

And now, predictably since oil is the foundation of almost all wealth, the world economy itself is beginning to look like a Hubbert-style bell curve. On the left side we see a steady historic rise as population and economic growth placed ever growing demands on the resources of the Earth. That upward rise has continued for decades, for centuries even. But now that the Earth can no longer spill forth a cornucopia of resources, we are teetering on the peak of that bell curve. We are beginning to glimpse the down side of the curve, and it is not a pretty picture.

And nobody seems to have any clue what to do about it.

Which is a shame, because for anyone who has been alert to the facts it has been clear for a long time that this day would come. It was predicted more than 200 years ago by Thomas Malthus, who addressed the limits of population and agricultural production. It was addressed for petroleum half a century ago by Hubbert, and 40 years ago by Paul Ehrlich in his book “The Population Bomb.” All of these and anyone else who dared express similar ideas have been denigrated and branded as scare mongers.

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Posted in Age of Oil, Economics, Essays and Opinion | Comments Off

Update on Continuing Arctic Melt Down

Sunday, September 21st, 2008

By David L. Brown

This is just a brief follow up to previous posts concerning the dwindling Arctic sea ice. Some climate change deniers have been hooting and hollering that the meltdown has reversed, because it appears that there will be slightly more sea ice this season than last year. However, last year was an extreme example, and this year’s melt is almost as great.

Here is the latest chart from the National Snow and Ice Data Center. The white area shows the present extent of sea ice, while the orange line shows the “normal” extent in the past. This is a pretty clear picture of a rapidly diminishing ice cover in the Arctic Ocean.

n_daily_extent_hires.jpg

All that open ocean within the orange line is free of ice and is still absorbing solar heat at a much higher rate than when the ocean was covered with ice and snow. It has also been reported that a larger proportion of the sea ice is “new,” having formed just last winter, and thus is thinner and more subject to future melting.

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Economic Troubles Signal Post-Resources Era

Saturday, September 20th, 2008

By David L. Brown

Economic Armageddon has arrived, and it should have been no surprise to anyone. As I wrote back on June 6, after oil prices zoomed upward, and accompanying a drawing of two sailing ships toppling from a flat Earth:

…the world economy is falling off the edge of the Earth, figuratively speaking. This is the real thing, people. As we and a few others have been trying to tell you, things are going to be different from now on, and as those figurative ships that represent the world as we have known it plunge into the abyss, an abyss where dragons may dwell, how is it going to affect we humans who have collectively created this enormous mess?

What is happening is that civilization has reached a truly historic turning point, and as with all such world-changing events, no one seems quite sure how to react. But why, you may ask, should the rules be suddenly changing?

The answer is basically easy to perceive if one has eyes with which to see. All through past history human wealth has been built on the development of natural resources. From prehistoric times civilizations rose and fell on the tides of copper, bronze, iron, gold, and more recently petroleum and uranium. The resources of land and human labor also were always at the root of wealth and so-called progress.

Until just a few decades ago, the U.S. Dollar and most other currencies were backed by hard assets, gold bars held in national reserves such as Fort Knox.

But we have entered a post-resources economy, a fact that was dramatically demonstrated by the runaway price of oil this year. That means that wealth is becoming disengaged from material assets. “Money” is no longer represented by gold or silver coins or certificates that can be redeemed for precious metals. In fact, to a very real extent “money” has become a phantom, existing only as bits and bytes in a worldwide network of computers. And that kind of “money,” my friends, requires a great deal of faith in the system and those who control it, for without faith the value of that “money” can be seen for the fleeting will-o’-the-wisp that it truly is.

Take away faith in the system and you have what has been happening during recent weeks on Wall Street and in Washington, and reflected in stock exchanges all around the world. For a few days this past week the entire house of cards looked as if it were going to fall apart, and there is no assurance that we are beyond that danger yet.

What does it mean to be operating in a post-resources economy? Obviously the cost and availability of natural resources will change the game for humanity. On another side, it means that some things that once were of great value but have declined in worth may regain their importance. Take human capital. Through most of history, economies grew and succeeded not only through exploitation of resources but also on the strong backs of human workers. Most people were farmers, and farming was a hard and labor-intensive activity. As the Industrial Revolution took place, once again human labor was a primary input, along with natural resources such as iron ore and coal.

Today in the advanced world farmers have become a tiny minority in the population, a transformation that took place in little more than a century. According to the United States Department of Agriculture, the efficiency of farm production increased from 27.5 acres per worker in 1890 to 740 acres per worker in 1990. That efficiency has no doubt climbed even higher, but there is an end in sight. Agriculture is moving head-on into the post-resources economy that is consuming the old resources-based economic models of the past.

We have discussed these changing tides in agriculture many times on this site, and I will only briefly remark on the reasons why farm production cannot continue as it has in the recent past. Modern industrial agriculture almost entirely resulted from the application of natural resources to replace human labor and land. Gas and diesel powered machinery, agricultural chemicals and fertilizer derived from petroleum and natural gas, a vast infrastructure of rail- and highway-transportation — all these are essential contributors to the growth of agriculture as it is today in the U.S. Even land itself is in limited supply and there are no virgin fields left to plow. And as those resources become scarce and the cost to produce them grows ever higher, something has to give, and it is.

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Posted in Economics, Essays and Opinion | 1 Comment »

Climate Lemmings March Confidently Onward

Sunday, September 14th, 2008

By David L. Brown

The text for today concerns linear thinking and how it fits into long-term planning and survival of civilization and the human race.

To define linear thinking, it is the tendency to think that things will keep on in the same way they are at the present time. For example, if there has for a certain time been a steady upward trend in the stock market, then linear thinkers will believe it will continue to go up ad infinitum in just that same way. Another example: If you are a lemming rushing along with your fellow lemmings, you will probably imagine that you will just continue to gallop along until, well, until you decide not to.

An examination of the fate of stock market optimists and lemmings might raise some doubts about the validity of linear thinking. The real world, when viewed in a somewhat longer view, is fraught with an alarming amount of change. Stock markets go up and down, sometimes crashing spectacularly. Lemmings make a regular habit of rushing right off of cliffs (or so it is said). But the tendency to embrace linear thinking continues to cripple the ability of many people to think rationally about the future.

The problem is that people tend to be myopic in how they view the flow of time — they judge the long term from their own short term experience. It is a particular problem for the young, because their experience is relatively short. Perhaps that has something to do with the ancient and now seemingly obsolete idea that wisdom comes with advancing years.

On that point, I remember an episode about 35 years ago when I had a young man of about 26 working at my public relations agency. That was in the early 1970s, and I was (in his eyes I suppose) a haggard and broken down 32-year-old. Although not actually a hippie, the “young” man was taken with some of the Flower Child culture and used to constantly throw up the idea that one should “not trust anyone over 30.” Wherever he is today he would be about 61 years old, almost ready to draw social security, and by his own words, for over three decades he has been completely unable to trust himself. What a tragedy. I wonder if he can look himself in the mirror? Oh, but wait, surely as he grew older he attained some of that wisdom that so often escapes the young. He may even have come to the opposite point of view (POV) and now looks with mistrust at the youth culture that is so much in evidence today. We can hope so for his sake.

Linear thinking is particularly apparent in attitudes about climate change. For some unfathomable reason, vast numbers of people “assume” (and remember that the word breaks down to reveal that “when you assume, you make an ass of u and me”) that climate change takes place in a linear fashion, and that it takes place everywhere in the same way. Tell one of these twits that the Earth is growing warmer and they will tell you that where they live it happened to snow on April Fool’s Day or some such irrelevant factoid, and therefore there is no global warming. Well, they are the April fools because their dim thought processes fail to alert them to the fact that climate change is not only non-linear, it is complex beyond our present ability to understand and predict.

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Posted in Climate Change, Economics, Essays and Opinion | Comments Off

Few Options for Keeping the Earth Cool

Saturday, September 13th, 2008

By David L. Brown

Those who have read my novel The Star Phoenix know that it is set in a future world devastated by climate change, social upheaval, plagues and other unfortunate events. Only a few humans survive and a small group wanted to leave the Solar System in search of another place to live. I won’t give away the plot line, but the subject of planetary engineering or “terraforming” played a crucial role.

Now this excerpt from the October 6 edition of The Economist draws attention to the possibility that a similar plight may await the Earth. The opening graf of an article titled “A Changing Climate of Opinion” talks of the science fiction concept of planetary engineering as it might be applied to Mars or Venus in order to make them habitable by human beings. The next paragraph follows:

It is an intriguing idea. It may even come to pass, though probably not in the lifetime of anyone now reading such stories. But what is more worrying—and more real—is the idea that such planetary engineering may be needed to make the Earth itself habitable by humanity, and that it may be needed in the near future. Reality has a way of trumping art, and human-induced climate change is very real indeed. So real that some people are asking whether science fiction should now be converted into science fact.

These are grim words coming from The Economist. You don’t even have to read between the lines to parse out the core message: The Earth may SOON become UNINHABITABLE.

We have written plenty over the past couple of years about the many aspects of climate change and other significant threats to the future of civilization and perhaps even the continued existence of humanity. Many voices have spoken out in warning, and despite the continued drumbeat of denial there seems to be every reason to be afraid, very afraid.

The article in The Economist (subscription required) goes on for several pages to discuss the possibilities of planetary engineering applied to the Earth. The source is a series of papers produced by The Royal Society, Britain’s oldest scientific academy, “outlining some of the options, and suggesting a few experiments to test whether they would work.” Unfortunately, it is thin beer indeed. In fact, it is rather pathetically free of any truly innovative ideas. The article admits that “[T]inkering with the atmosphere or the oceans on the scale required to do this would be highly risky and extraordinarily complex.”

A great deal of wordage is spent examining the idea of priming the oceans with particles of iron to increase the growth of plankton, thus drawing greenhouse gas (GHG) out of the atmosphere. That idea is unproven and has obvious problems. For one thing, it would likely increase the acidity of the ocean with possibly dire results. Never mind Texas, it REALLY doesn’t pay to mess with Mother Nature. The brilliant idea of introducing rabbits into Australia is mentioned as an example of unanticipated effects that so often result when we meddle in Her realm.

Another idea: Plant more trees. Umm, sure, let’s do that … but just where are we going to plant them? In the Sahara Desert? And, oh, what about the fact that we are already cutting down rain forests everywhere? Is that a mistake then? How many trees do we have to plant to balance the amount of GHG produced by burning fossil fuels that took hundreds of millions of years for natural process to sequester in the Earth? Far too many, I fear, plus we need all the arable land to grow food for the nearly seven billion mouths we have to feed.

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Posted in Climate Change, Essays and Opinion, Extinction, Melting Planet | 1 Comment »

Too Little, Too Late for Auto Industry

Wednesday, September 10th, 2008

By David L. Brown

Here is an unusual opportunity to see a photograph that illustrates the maxim about “too little, too late.” It is a picture of the Chevrolet Volt all-electric car which is now under development and will be officially announced in about a week by General Motors.

volt.jpg

Well, why is this less than wonderful news? There’s nothing wrong with economical, electric powered cars, and I support them fully. But as I stated, Detroit is promising “too little,” and “too late.”

“Too late” because the time to have begun the transformation of our national fleet away from big-engined cars, SUVs and pickups was about 30 years ago. Back in the 1970s the handwriting was already on the wall, thanks to two oil shocks. The first, in 1973, resulted from President Nixon’s devaluation of the dollar and breaking the currency from the gold standard. OPEC responded by cutting supplies and creating a shortage that led to long lines at filling stations. That pushed oil prices up to compensate for the devalued dollar.

The second oil shock, in 1979, apparently resulted from no particular reason but panic that led buyers to rush to top off their tanks, thus creating a short-term supply problem, which led to more panic, rinse and repeat. That one didn’t last long, and I remember at that time taking a driving business trip from Chicago to as far East as New Hampshire without any problem finding fuel.

But the seed was planted and at that time people were aware of the need for more economical automobiles. Unfortunately, memory is short and history is long and the American love of “big iron” soon was in full bloom once more, with the enthusiastic backing of the auto makers. The oil shock of 1973 did result in Congressional action, to wit passage two years later of the legislation to create the CAFE (Corporate Average Fuel Economy) standards for fuel efficiency. That law set goals for auto makers to reach and maintain average fuel economy over the total number of autos they sold.

Unfortunately, Congress left a loophole in the CAFE program, a loophole that they left wide open and through which the automakers launched a three decade program of deceitful behavior. The “out” that Detroit exploited was that “light trucks” were waived from the CAFE standards. At that time, the term applied to pickups and slightly larger vehicles such as delivery vans and box trucks. It didn’t take Detroit long to “invent” the useless SUVs, which they claimed were “light trucks,” as well as to upgrade pickup trucks with comfortable seats, extended cabs, fancy accessories, and everything it took to entice people who had no practical use for a pickup truck to buy them by the millions just for basic transportation and to project a “macho” image.

All right, here we are in 2008, 35 years after the first oil shock, and we are just now, in the past few months, learning that we need to have a completely different kind of private automobile fleet. So, case made for “too late.” But there is one more point. GM vice chairman Bob Lutz has stated that no Volts will actually be delivered to dealers until November, 2009 and buyers will not get their hands on them until 2010. Full production will not be reached until later that year and will probably come with the 2011 model. Too late indeed, as GM runs through billions of dollars of capital trying to keep its sinking ship from diving to the bottom of the sea.

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Posted in Age of Oil, Economics, Energy Technology, Transportation | 1 Comment »

Is Petroleum Really Too Expensive?

Tuesday, September 9th, 2008

By David L. Brown

The “horrible” price of oil has been portrayed as an economic disaster of unprecedented concern. That is a myth. What is actually the case is that oil has long been undervalued and at last is being priced at a fair and equitable level. And, in truth, recent oil price trends have been affected more by monetary values than anything else. For example, when adjusted for inflation over more than three decades, oil was more expensive at some points back in the 1970s than it is today.

To fully appreciate this point, take a look at the graph reproduced below, which summarizes the results of a study from the American Geological Institute.

goldoil.jpg

This chart tracks the price of oil during the past few years in both Euros (the red line) and the dollar (blue) against the value of gold as shown in the purple line at the bottom. Remembering that gold was once the standard upon which monetary values were based, it is interesting to note that the increase we have seen in recent years is not at all reflected in the value of gold, but in the value of the currency in which commodities are traded. Note that when valued in terms of gold, the price of oil actually peaked back around the end of 2001 and has been fairly stable if not trending slightly lower since.

Now it might be argued that this is a misleading comparison. For instance you might claim that the price of gold has merely been pushed up as a hedge in response to rising oil prices. There might be a kernel of truth to that, but in the end that dog don’t hunt for a very simple reason, and that is that the value of many other commodities besides gold have been going up, not least food. Higher prices across the board equal inflation, and inflation means lower monetary values. If one were to create a similar graph indexed against food costs instead of gold, I suspect that things might look even worse.

If you doubt that, check your grocery bills. Some of the price increases I have noted recently are astounding. For example I enjoy catfish and until recently catfish fillets were consistently selling for $2.99 a pound in our nearby supermarket. A month or two ago the price suddenly spurted upward, and I don’t mean by a few cents. In fact, it doubled, to $5.99 a pound, and has remained solidly at that price ever since. I have started eating more chicken and even sirloin steak which can sometimes be had for around the $2.99 price formerly being asked for catfish. What would a catfish-based graph look like, hmm? One could use corn, wheat, rice, or any number of other food commodities to yield a similar picture to the one above.

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Posted in Age of Oil, Economics | 1 Comment »

“Insourcing” Brings Manufacturing Back to U.S.

Monday, September 8th, 2008

By David L. Brown

I wrote a few weeks back that due to several factors the allure of offshoring manufacturing to Asia has faded, and that it will continue to do so. One factor is the higher energy costs that make shipping goods halfway around the world a major expense. Another is that workers in China and other Asian nations are earning higher wages and expect to see their standards of living to rise even further.

But, too bad for them, there are limits that constrain the extent to which an economic trend can continue. Now, according to an article in The Financial Times, on the FT.com website, an attractive choice for manufacturing today is … wait for it! … the United States.

Says the FT article:

The latest cheap manufacturing site for European companies is not in Asia or eastern Europe but the United States, say top executives from some of the continent’s biggest companies.

“It may sound like a joke but it can be cheaper than you imagine to manufacture there,” the chairman of one of Germany’s largest automobile groups told the Financial Times.

The reason is less the level of the dollar, which remains relatively low in spite of the euro’s recent plunge, but rather the huge level of incentives some US states are offering companies to set up factories in their region.

It is true that incentives are a major factor in the decision of European companies such as Volkswagen, which is building a $1 billion plant in Tennessee, and Thyssen-Krupp, which is building a new steel mill in Alabama. But that is not all the story. Other factors include the low dollar, which makes U.S. exports competitive, rising transport costs, and the availability of skilled labor.

A month or two ago I read that the manufacturers of the new Tesla all-electric sports car in California had changed their original plans to have the battery packs for the cars manufactured in the Philippines, shipped to England for partial assembly, and the cars then shipped to California for final assembly. Now, the entire manufacturing process takes place in California with American workers, and the reason was that it was cheaper than shipping all the parts all over the world. Remember that this is a car that sells for $100,000, so there would have been some margin to play with, but the company chose to do it all in the U.S.A.

This is a strong sign that even though the world economy may be approaching difficult times, it may not be America that will suffer the most. As I wrote recently, should we be approaching a new depression it may be the Third World and Emerging Economies that take the biggest hit. That is the opposite of the Great Depression of the 1930s, when it was the advanced economies that suffered while poor nations hardly noticed the difference.

The rulers of places such as China and India should be afraid, very afraid. Their economies are fragile and dependent upon exported goods and services while requiring imports of natural resources. Add to that their enormous populations, made up of hundreds of millions of desperately poor people and growing middle classes with a strong desire to improve their standards of living. In all, those two countries alone are home to well over two billion human beings, and it would not take much to throw their economies off the tracks.

America has its problems, no doubt about it. The subprime mortgage scandal is blowing up, as clearly signaled by the nationalization of Fannie Mae and Freddie Mac today. But we are still by far the richest and most powerful economy in the world, and nowhere near as vulnerable as those emerging economies. The trend toward new and expanding manufacturing here at home is further evidence that we may be in a better position than many others. For the last few years we have seen American jobs disappear through “outsourcing.” Welcome the new trend of “insourcing,” and celebrate the fact that new factories and industries tend to be up-to-date and state-of-the-art, while at least some of the manufacturing base that has been sent overseas was outdated and needed to be replaced anyway.

Now if we can just get serious about becoming energy independent, we can once again stand tall in the world.

Posted in Economics | 1 Comment »