This article seems horrid upon First Read, but then some Thoughts intrude. The first is that there are too many bottoms on the Water, all burning excessive amounts of diesel at high Average Cost over the last five years. The second Thought is that major Port systems are slowly starting to unclog, this totally due to the downturn in traffic; sitting in Port access costing more than $25,000 per day. Rail systems are slowing to the degree that Safety has probably been tripled, while still providing sufficient traffic for high marginal Profits. Air Traffic Controllers are starting to breath easier as all major airlines cut the number of their flights. American Consumers are attempting to restrict their Expenditures to stay within their Means–even if those Means include high Mortgage and a few maxed Credit Cards; something that they can hope to repay without shooting their elderly Parents. Developing nations have had years of extreme growth in which Time to start developing their own domestic Consumption; closing plants and lost Jobs might excite them into production for domestic consumption. The Comment that developing nations need accelerating growth rates to provide Jobs for expanding Populations ignores that fact most of these nations could not provide such Jobs even with a 14% per year growth rate; please give them the Internet address to Planned Parenthood.
Here is one of those rare Times where I wish George W. Bush would develop his plans with his usual speed. I am against the Auto Bailout because it is a waste of Money needed elsewhere. Congress and President could get equal distance with a decree that troubled Auto makers must enter Chapter 11 Bankruptcy, with the Congressional declaration to stop any devolvement into a Chapter 5 Bailout. This means there must be a mandatory Reorganization of any of the domestic Automakers who want Public assistance, though selling off the Companies in segments is forbidden without Congressional approval. Stockholders will be incensed at the loss, but they should get mad at their Management, not the American Taxpayers. The UAW will be angered at the loss of their Golden Parachutes, still Congress can direct the Bankruptcy Court that Retirees be paid a supportable Percentage of previous Employment Pay; One must understand that the current Retiree packages probably cost less than $300 per Vehicle, though Health Benefits probably cost another $100 per Vehicle; the problem is lack of Vehicle Sales because of doubtful Product. I would suggest Cradle to the Grave Servicing of the Vehicle for a Set fee of $50 per Maintenance Request, not to include the Cost of Part replacements. The Car companies must get their Act Together, and that will not happen with a CEO taking only his $14 million Salary.
I take a different attitude towards the Recession than does James Hamilton or Michael Dueker. The economy most definitely shifted Gears, and it was a rapid Downshift without previous slowing or braking. My philosophy was that the Economy tired of excess draft of Resources, with the resultant rise in Pricing, all due to One too many Consumption generations being present. It is not anything I would like to define precisely, but if it is true, then Job Recovery will pace Baby Boomer retirements. This is a complexion I enjoy no more than any of You, especially as I am a Baby Boomer myself. The only Benefit Recessions bring is a decentralization of economic performance, where small business units assume a local prominence with a localized labor force. It is really not enough to make a viable difference. I’m not up for Doom and Gloom in my dotage. lgl
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