Wednesday, February 29, 2012

Politics or Policy? Won't Make Much Difference in the End

Plans for U.S. manufacturing may yield more votes than jobs - Of course it is to help the "middle class." But it is 19th Century thinking at best.
"The days where you could get a job right out of high school, step on a (factory) line and make 35,000 dollars a year, 40,000 dollars a year, are pretty much not out there anymore," said Rich Peterson, a vice president at Astro Manufacturing and Design here in suburban Cleveland.
I'm a bit surprised that robots haven't taken over more of manufacturing than they have. I guess it will be another 20 years or more before they are flexible enough. But at some point, raw materials will be loaded into one side of a factory and finished goods will spit out of the other. Robots don't need retirement or health benefits. They don't take vacations. (Mean-time-to-failure and mean-time-to-repair will come to be known quantities, and fit into the equations to help you decide how many do you need, what spares to stock, etc.)

But most of the policies being bandied about from both sides of the political divide are mostly window dressing in an election year.
Like the auto industry's resurgence, such proposals may strike an emotional chord with recession-weary voters who have suffered through two financial bubbles in the last 12 years.
Of course the Tribune doesn't place blame for either of those 2 bubbles on the people. (It is the eeeeevil bankers, or someone else.)

I mean consider the dot-com fiasco. I had discussions with otherwise reasonable people that it didn't matter if companies made money or how much money they made. Then they would say something about Edison or Bell, never bothering to think that both always made money once their inventions went to market.

And the housing bubble. Was it the eeeeevil bankers? Or the people who said "you never lose money in real estate," even though if you study the history of the last 50 years people lose money in real estate on a regular basis. (Hasn't anyone even heard of Japan?) And the Community Reinvestment Act, as amended, basically said it was unfair of banks to only lend money to people who actually had a chance to repay. And the folks who treated their homes like ATM machines. And the folks who signed up for loans they couldn't afford, didn't understand, couldn't be bothered to understand because it was their DREAM to have an acre of granite in their kitchen. No it wasn't any of those people.

Politics and most things don't work out very well. But politics and economics is what caused the Community Reinvestment Act, stopped the revamping and rationalization of Fannie Mae and Freddie Mac in the early years of this century. The combination gave a half billion dollars to a solar company with a product that was at least 30% more expensive than its closest competition. (Hint - Americans love a good deal, look at the airline industry. If you are 30% more expensive for the same outcome, you haven't got a chance in this market. And Solyndra was selling a commodity, namely kilowatts of solar energy.)

But that won't stop anyone from combining the 2 in an election year.

1 comment:

Anonymous said...

Magnum you jackwagon you. How dare you. You know damn well people do not like to be told the hard cold truth. From now on you need to tickle peoples ears by telling sugar coated lies.