Planned Obsolescence: Products Designed to Fail

Planned Obsolescence: How Companies Encourage Hyperconsumption
by Sylvain Lapoix - OWNI.eu

Like many of their professors, students at the Sorbonne had become used to going to buy their ink cartridges from a small shop on a nearby street. With no manufacturer affiliations, it carried shelves full of ‘generic’ cartridges that worked with printers from big name brands like Epson, Canon, HP and Brother. But that small shop soon faced a very big problem: some new printers only recognise ‘proprietary’ consumables that they can detect by matching their hardware signature against a signature in a chip on the cartridge. Anybody hoping to get round that by using a syringe to top up their existing cartridge with new ink was soon caught out because the chips can also track ink levels. But try seeing things from the manufacturers’ point of view: print cartridge sales can represent up to 90% of their turnover, so it’s not hard to see why they want to prevent consumers from going elsewhere. This process of trapping consumers in an endless cycle of buying more by supplying products that soon become unusable or beyond repair has taken on the almost cult name of ‘planned obsolescence.’

This rather abstract term hides a whole range of manufacturing and marketing techniques that all share a single aim: encouraging consumers to buy more to keep factories busy and products flying off the shelves. The easiest way to achieve this is to reduce a product’s life cycle by employing different techniques that lead to a constant squeeze on labour costs and a wasteful use of natural resources, with little concern for the current shortages in raw materials, although the practice has managed to hold back the price of rare metals and copper.

From disposable light bulbs to the iPad 2

Just after the First World War, the future of filament-based electric bulbs looked very bright when a commercial agreement between the Allies and Germany was signed. Before the ink was even dry on the Treaty of Versailles, Dutch firm Philips, the American General Electric and German Osram joined forces with other European and Japanese companies in an agreement to limit the lifespan of their light bulbs and fix prices as part of the Phoebus cartel.

 

But it would take the simultaneous arrival of the Depression and Frederick Taylor’s theory of scientific management to bring about the idea that it was both technically possible and commercially desirable to stimulate demand in the consumer. Often quoted as the first recorded mention of the term ‘planned obsolescence’, this 1932 text by Bernard London puts the problem as follows:

“In a word, people generally, in a frightened and hysterical mood, are using everything that they own longer than was their custom before the depression. In the earlier period of prosperity, the American people did not wait until the last possible bit of use had been extracted from every commodity. They replaced old articles with new for reasons of fashion and up-to-dateness. They gave up old homes and old automobiles long before they were worn out, merely because they were obsolete.”

For industrialists, the idea represented something of a commercial Holy Grail, a way to create more demand in a market that was already saturated. How could they sell more fridges, cars and shoes to customers that already had what they needed? They had three main solutions:

• technical: built weaker, less durable products that are impossible to repair;
• design: artificially age older products by making them seem old-fashioned and out-of date;
• legal: lobby for new legal requirements and standards that mean customers have to buy a new product to stay within the law.

Not every industry uses all three methods. Built-in technical planned obsolescence is more common with white goods (fridges, ovens and so on), but brand new designs and increasingly short turnaround times in between different generations of the same product is a something of a speciality for consumer electronics manufacturers. Apple has managed to achieve remarkable success by using both methods at the same time: its Macs are entirely proprietary and very difficult for the user to modify; if you try taking one apart yourself, you’ll find you’re no longer covered by the guarantee.

They form a closed system, meaning it’s hard to switch the hard drive or graphics card, or tweak the performance in any way, because the manufacturer is the only one that supplies the parts. Finally, software and hardware updates come along incredibly frequently. The manufacturer’s ‘addicted’ fans are encouraged by incessant publicity to upgrade to the latest expensive mobile phone, laptop or MP3 player—despite the fact that Apple’s products are part of the same low-cost supply chain with poorly-paid workers and cheap raw materials as everybody else’s. The firm’s main sub-contractor, Foxconn, uses parts of its factories to work on products for Apple’s rivals, including HP, Sony, Intel and Dell.

Writing planned obsolescence into law: the ‘lift cartel’

A great example of this ‘forced consumption’ is the humble lift.  The four main lift cabin manufacturers, Thyssenkrupp, Koné, Otis and Schindler, appealed to the French standards-setting body, AFNOR, after fatal accidents in Amiens and Strasbourg. They expressed their concerns to the minister, Gilles de Robien, who tabled a law that will lead to a huge replacement programme to ensure the country’s lifts are safe to run between 2013 and 2018.  This safety-critical upgrade is set to cost between four and eight billion euros.

But according to a report by Parisian councillor Ian Brossat published last year by Marianne2, the programme is very unlikely to be of much use to the general public. It’s not the lift cabins themselves that cause problems, but poor maintenance carried out by overworked technicians.  And the two accidents that led to the de Robien law were both triggered by insufficient maintenance …

These techniques have certainly had the desired effect. According to a joint report by Friends of the Earth and the French Centre for Independent Information on Waste, despite the fact that the market for manufactured goods was already saturated by the beginning of the 1980s, purchases of electronic and electrical equipment have grown six-fold since the 1990s. In the same time, another report by consumer organisation Que Choisir has shown that the average lifespan for white goods has fallen from 10-12 years before 2000 to just 6-8/9 years today.

A trend in favour of consumption

Guarantees and warranties, which have been getting shorter and shorter since the start of the last decade, represent the final chapter in this story. Writing in the Wall Street Journal, journalist Jane Spencer observed that “in the past year Dell Computer has slashed warranty periods from three years to one.”  At the same time, Apple’s earliest iPods were amongst the first products to offer users a mere 90 days of protection.

That’s just three months. The rapid reduction in labour costs in Asia, South Africa and former Eastern Bloc countries has meant that even pricey gadgets are now seen as disposable. Repairing is left to geeks, eco-activists or anybody nostalgic enough to still have an old soldering iron.

Putting these various ways of implementing planned obsolescence to one side though, it’s propaganda—in the original sense of the word, being able to convince the masses—that has had the biggest impact.  It has served to maintain the idea that using these techniques is legitimate, despite the disastrous consequences they have for society and the environment. Edward Bernays, the so-called ‘father of public relations’ goes much further than Bernard London ever did. His work contains the real basis of the idea that consumerism is a social fait accompli that now defines how we think about ourselves, what we do and our interactions with others. Woodrow Wilson asked the Austrian to help him encourage the American people to join the war effort in 1917, and in his 1928 book Propaganda, he explains how, while working for Lucky Strike, he managed to persuade women to start smoking.

Previously seen as primarily a men’s activity, Bernays succeeded in convincing American women to take up the habit by giving leading suffragettes free cigarettes and encouraging them to brandish them as ‘torches of freedom.’  This inversion of social meaning by attaching an artificial political meaning to an ordinary consumer product foreshadowed Noam Chomsky’s idea of ‘manufacturing consent.’

When marketing finally won the day over engineering, non-durability became a principle of industrial design forever.  But even before then, it was a social construct, as Victor Lebow, a distributor, explained in a 1955 article that is examined in documentary film The Story of Stuff:

“Our enormously productive economy … demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption … we need things consumed, burned up, replaced and discarded at an ever-accelerating rate.”

Permanent consumption is seen as proof of a happy, fulfilled life and leaves individuals with only one objective, accumulating and replacing material goods, with design contributing to making them more or less attractive. The mobile phone, the car, and the watch are the three examples par excellence of this vision. Linked with Bernays’ idea that we take pleasure in destroying our obsolete possessions, this world view also has echoes of Freud’s ‘death drive’, something also found in the writing of John Maynard Keynes by Gilles Dostaller and Bernard Maris. Except that at the time, the two economists were hoping to find an explanation for what had gone wrong with the system that led to it to destroying itself. But there is no reason to make the distinction: bankers and businessmen are consumers like the rest of us, but on a different scale. On their scale, the talk is of systemic crises rather than planned obsolescence. And these crises, we’re told, are equally vital in keeping the whole system turning.

GM producing 70% of autos outside US

GM producing 70% of autos outside US

06 June 2012 by Michael Stumo.

Dan Akerson, CEO of GM, says that seven out of 10 GM automobiles are built outside the U.S.  They have 11 joint ventures with Chinese government controlled auto manufacturers.

They are moving R&D to China.

When the federal government bails out an industry or provides tax incentives or subsidies, or when state economic development agencies do the same, there need to be terms that benefit the U.S. in terms of production and job growth.  We can’t subsidize offshoring.  Producing here and selling to our wealth consumer market need to go together.

Vince Wade has the video documenting GM’s actions.

They Never Intended to Share It

How Much of the Pie?

by DAVID MACARAY

 

One of the criticisms you hear about organized labor is that unions are too adversarial in their dealings with management.  They’re too belligerent.  People tell you that instead of seeing themselves as management’s “enemy,” unions would be better served by seeing themselves as management’s partners, because, in effect, that’s what they are.  Labor unions being regarded as partners?  Working people being treated as equals?  Wow, those are great ideas.  In fact, they could be the basis of an excellent science fiction story.

Labor unions—organized collectives established to represent the interests of employees—haven’t always been the first choice of discriminating workers looking to better themselves economically.  Historically, union membership was often pursued only after earlier and more ambitious efforts to get a larger slice of the pie had failed.

Once it became clear that the wage-based labor system had too many inherent defects to provide long-term security, American workers began seeking alternatives.  One of
those alternatives was the “cooperative.”  This was an arrangement where the workers independently owned and operated the business, and split all the profits among themselves.  They didn’t need a union to fight management because they were management. U.S. cooperatives go all the way back to the 19^th century.

Perhaps the most famous co-op in history was the Players League, established in 1890.  The Players League was a group of professional baseball players who decided they didn’t need to be “owned” by someone in order to flourish.  These weren’t marginal players or bench-warmers who recklessly set out on their own, believing they had little to lose.  The Players League (composed of eight teams) featured some of the biggest stars of the day, including legendary Hall of Famer Mike “King” Kelly.

While this was a revolutionary concept to many, the players themselves saw it as basic arithmetic.  In their view, all you needed to become a successful baseball team was a field to play on, teams to play against, and fans willing to pay to watch you play.  What could be simpler?  More to the point, what were the advantages of having a group of businessmen “own” you?  Alas, the Players League lasted only one year, falling victim to major league baseball’s threats, pleas and considerable muscle.

Manufacturing workers took a similar tack.  Because it was their sweat and toil that yielded the profits, workers decided to eliminate the middle-man, and run the operation themselves.  While it was a noble and ambitious endeavor, what killed the co-ops was, among other things, a terminal case of undercapitalization.  They simply didn’t have the cash to keep these enterprises going.  And unlike “conventional” businesses that always had the banks to turn to, worker co-ops found it difficult to get loans or attract investors.

Another creative alternative to the traditional wage-based format is what is loosely called “profit-sharing.”  Although profit-sharing schemes have been notoriously unreliable (e.g., profits are concealed, payments are deferred, benchmarks are manipulated, etc.), the premise itself is tantalizing.  You work for a base wage, but you also share in the profits.  In short, instead of simply being hired help, you are now part of the company.

It shouldn’t surprise anyone to learn that the reason many of these profit-sharing arrangements “failed” was because they were too successful.  It’s true.  Some of these profit-sharing ventures turned out to be wildly lucrative.  And once management saw how much money their employees (both salaried and hourly) were raking in under these profit-sharing plans, they immediately dismantled them.

Their thinking ran along these lines:  Why on earth are we giving people 6-and 7-percent annual raises when we know for a fact (by reviewing their earnings history) that they’re more than willing to accept 3-percent raises?  Why would we do that?  To management, the answer was simple.  You don’t do it.  Instead, you go back to the standard, wage-based format where workers are treated as “overhead,” and you take your chances at the bargaining table.

This is why the labor-management dynamic is adversarial.  The acquisitive impulse is biological.  Labor has to fight for every scrap because management is biologically hard-wired to resist any form of sharing.  No matter how profitable a business is, management cannot bring itself to part with one more nickel than is absolutely necessary, and therein lies the crux of the relationship.

Labor unions aren’t the solution to everything.  But given the unfortunate track record of worker co-ops and profit-sharing schemes—coupled with management’s detestation of sharing the wealth—unions (with roughly 14.8 million members) are clearly the only thing keeping the American working class afloat.

The Big Contraction

Look Out Below!
By MIKE WHITNEY

The slowdown has begun. The economy has started to sputter and unemployment claims have tipped 400,000 for the last seven weeks. That means new investment is too weak to lower the jobless rate which is presently stuck at 9 percent, according to the U3. Manufacturing--which had been the one bright-spot in the recovery-- has also started to retreat with some areas in the country now contracting. Housing, of course, continues its downward trek putting more pressure on bank balance sheets and plunging more homeowners into negative equity. 

The likelihood of another credit expansion in this environment is next-to-none. Total private sector debt is still at a historic high at 270% of GDP which augurs years of digging out and painful deleveraging. Analysts have already started slicing their estimates for 2nd Quarter GDP which will be considerably lower than their original predictions. With the economy dead-in-the-water, the IPOs, the Mergers & Acquisitions, and the stock buybacks and all the other ways of amplifying leverage will slow putting a dent in quarterly earnings and pushing down stock prices. Here's a clip from the Wall Street Journal:

"After a disappointing first quarter, economists largely predicted the U.S. recovery would ramp back up as short-term disruptions such as higher gas prices, bad weather and supply problems in Japan subsided.

But there's little indication that's happening. Manufacturing is cooling, the housing market is struggling and consumers are keeping a close eye on spending, meaning the U.S. economy might be on a slower path to full health than expected.

"It's very hard to generate a rapid recovery when rapid recoveries are historically driven by housing and the consumer," said Nigel Gault, an economist at IHS Global Insight. He expects an annualized, inflation-adjusted growth rate of less than 3% in coming quarters—better than the first-quarter's 1.8% rate, but too slow to make a meaningful dent in unemployment." ("Economists Downgrade Prospects for Growth", Wall Street Journal)

The Fed has tried to revive the economy by buying government bonds (QE2) which helped to boost equities prices. Unfortunately, the program sent gas and food prices higher too, which has only deepened the distress for consumers forcing them to cut their discretionary spending even more. While retail sales improved significantly in the latter months of the program, a closer look at the data shows that most of the money went for food and fuel. So, basically, QE2 was a "wash". Now businesses are left with bulging inventories and fewer customers because demand is weakening. This is from the New York Times:

"An economy that is growing this slowly will not add jobs quickly. For the next couple of months, employment growth could slow from about 230,000 recently to something like 150,000 jobs a month, only slightly faster than normal population growth. That is certainly not fast enough to make a big dent in the still huge number of unemployed people.

Are any policy makers paying attention?...

The most sensible response for Washington would be to begin thinking more seriously about taking out an insurance policy on the recovery. The Fed could stop worrying so much about inflation, which remains historically low, and look at how else it might encourage spending. As Mr. Bernanke has said before, the Fed "retains considerable power" to lift growth.

The White House and Congress, meanwhile, could begin talking about extending last year's temporary extension of business tax credits, household tax cuts and jobless benefits beyond Dec. 31. It would be easy enough to pair such an extension with longer-term deficit reduction." ("The Economy Is Wavering. Does Washington Notice?", New York Times)

This is more than just a "rough patch". The economy is stalling and needs help, but consumers and households are not in a position to take on more debt, and every recovery since the end of WW2 has seen an increase in debt-fueled consumption. So, where will the spending come from this time? That's the mystery. The early signs of "green shoots" were produced by fiscal stimulus from increased government spending. But now that the deficit hawks are in control of congress, the budget will be pared and the economy will remain sluggish. If government spending is cut, unemployment will rise, the output gap will widen, and GDP will fizzle. Contractionary policies do not lead to growth or prosperity. Just look at England. 

Most of the Inflationistas have returned to their bunkers sensing that deflationary pressures are building and the signs of Depression have reemerged. Stocks appear to be on the brink of a major correction. Here's what economist Nouriel Roubini told Bloomberg News on Friday:

"The world economy is losing strength halfway through the year as high oil prices and fallout from Japan's natural disaster and Europe's debt woes take their toll....

Until two weeks ago I'd say markets were shrugging off all these concerns, saying they don't matter because they were believing the global economic recovery was on track. But I think right now we're on the tipping point of a market correction....

With slow global economic growth, they're going to surprise on the downside. We're going to see the beginning of a correction that's going to increase volatility and that's going to increase risk aversion." ("Roubini Sees Stock-Correction 'Tipping Point'", Bloomberg)

With short-term interest rates stuck at zero and QE2 winding down by the end of June, the Fed appears to be out of bullets. At the same time, government (at all levels) is trimming spending and laying off workers. 

When spending slows, the economy contracts. It's that simple. Without emergency stimulus, commodities will fall hard and stocks will follow. Look out below.

When Markets Fail

The Shell Game of the Financial Press
By DAVE LINDORFF

One of the great mantras of the modern economics profession is that markets know best, and that the collective "wisdom" of investors is generally correct.

I've never really believed that, having spent years writing about business and finance. In fact, my interviews with market strategists, Wall Street economists and portfolio managers have convinced me that it's the rare investor or analyst who has done much serious reading of history, political science or even economics and finance for that matter. Sure, some people can be very good at analyzing the worth and the potential of a specific company, but when it comes to macroeconomic trends, most of the explanations you get are very narrowly focussed and ignorant, showing little concern for or understanding of the great drivers of history, economics or politics.

That said, I'm still left scratching my head at today's roughly 3% jump in the US equities market, which the investment analyst community is attributing to a report by the relatively obscure Institute for Supply Management, which announced that its index of manufacturing activity in the US had risen a bit to 56.3, instead of dipping slightly, as had been predicted by analysts.

Word that manufacturing was improving led to a stampede into equities by investors, especially into the stocks of manufacturing companies like Caterpillar, United Technologies and Boeing, which all jumped by 1-3% for the day.

But here's the thing. It might nice to see manufacturing orders picking up, but manufacturing in the US only represents a puny 12% of the US economy, a share that has been falling steadily for decades as US companies shift production month after month, year after year overseas. It would take one hell of a boom in manufacturing to kick start a US economy in which one in five workers is either out of work, working part-time while wanting full-time work, or has given up looking for work because there are no jobs.

Speaking of which, on the same day that the ISM report on manufacturing gains came out, ADP, the payroll check vending company that handles many company payrolls, reported that far from improving, the nation's job situation was still in decline, with companies cutting 10,000 jobs in August. The government is also expected, later this week, to weigh in with a report that employers cut 120,000 jobs in August, after cutting 131,000 in July.

Nobody's hiring, the percentage, and number, of people who have been jobless for two years(!) is the highest since those numbers were first tallied, and the Obama economic stimulus package that kept jobless numbers below 10% is running out, meaning that joblessness is likely to start to rise significantly into next year and stay high for some time to come. Housing prices are also continuing to fall too, and precipitously, meaning that most Americans are losing wealth, not gaining it. Given all that, the notion, reflected in today's surge in the Dow, NASDAQ and S&P Indexes,s that better times are on the way, is really quite absurd.

So too is the idea that markets know best and that investors as a group possess some kind of collective wisdom and forecasting acumen.

Despite Rhetoric re: Saving U.S. Manufacturing, Obama Pushing Failed Bush Policies

Obama is talking up a plan to boost U.S. manufacturing,
And also pushing Bush's offshoring agenda behind the scenes.
By Mike Elk, AlterNet
Posted on August 26, 2010

With jobs at the forefront of every voter's mind, President Barack Obama and key members of his administration have been publicly promoting new trade policies to make sure that U.S. companies don't send manufacturing jobs overseas. It's a politically and economically sound strategy—but unfortunately, it's all talk. Behind the scenes, the administration is still pushing for the same failed Bush-era trade policies that sent millions of American jobs abroad and created global imbalances that helped fuel the financial crisis.

After witnessing the outrageous Congressional hurdles presented to Obama's efforts to pass a jobs bill, the administration is understandably looking for an inexpensive, politically popular way to create jobs in America. Encouraging companies to make more of their goods in the United States creates jobs directly and indirectly, since additional jobs associated with the services for manufactured goods become needed. The plan also eases international capital imbalances that funneled trillions of dollars into the Wall Street casinos, making the entire global economy less susceptible to financial shocks. It also happens to poll very well, something Obama adviser Rahm Emmanuel clearly understands.

"In coming weeks, the president will expand his push to create clean-energy jobs to include more traditional industries such as automobiles and railroads."Made in America" will become the "big theme," Rahm Emanuel said in an interview with the Wall Street Journal.

The numbers on American manufacturing are grim. In October 2009, more people were officially unemployed (15.7 million) than were working in U.S. manufacturing. That hasn't happened since the Great Depression. And much of the damage has been dealt in the past decade alone -- 5.5 million manufacturing jobs, nearly 32 percent of the U.S. total, have been lost in the United States since George W. Bush took office in 2000.

Rebuilding an economy based on manufacturing makes our society less susceptible to the risks created by Wall Street speculation, and spurs further economic activity outside of manufacturing itself. We can't have a stable economy without a sturdy manufacturing base-- without it, our prosperity is dictated by the whims of big financiers. By 2007, nearly 40 percent of U.S. corporate profits were coming from finance, leaving a feeble base to support workers when Wall Street crashed. Fortunately, for each dollar invested in manufacturing, another $1.43 of economic activity in industries linked to manufacturing is created—a multiplier effect that makes the sector an efficient way to create jobs.

There are few political slogans more popular on the left or the right than "Let's make things in America again!" House Democrats began to talk about rolling out a massive "Making it in America" strategy after getting briefed on a poll by the Melman Group and the Alliance for American Manufacturing. The poll revealed that 74 percent of self-described Tea Party supporters would support a "national manufacturing strategy to make sure that economic, tax, labor, and trade policies in this country work together to help support manufacturing in the United States." The top concerns of most Americans, including Tea Party supporters, is not the size of the federal budget deficit, but our relationship with China, which includes a massive trade imbalance that neither major political party is directly challenging.

After seeing this poll, Scott Paul, executive director of the Alliance for American Manufacturing, said Democrats in Congress were eager to help revive the American manufacturing base. Nancy Pelosi then pressed the White House to adopt a more formal strategy and was seen leaving the White House with a folder labeled "Making It in America."

So House Majority Whip Steny Hoyer consulted with the Obama team and announced a play to roll out 18-20 bills focused on promoting manufacturing in the United States. Roll Call labeled it a "Hail Mary" eager to show they can do something on jobs. It's political gold, since Republicans will have a hard time obstructing measures strongly supported by their own political base. And the plan is cheap—it doesn't impact the budget much, since most of the bills deal with simply re-routing government subsidies to companies that make products here, rather than paying them to companies that offshore jobs.

This program marks a complete about-face from the Obama administration's prior stance on trade. Lori Wallach, director of Public Citizen's Global Trade Watch said that seeing Rahm Emanuel pushing Buy America provisions put her in a state of shock. "The White House has systematically pushed back against the actual attempts by members of Congress to expand Buy America policy." Forces in the White House are working against attempts to include Buy America legislation in clean water legislation.

But the reality is that Rahm Emmanuel has only taken the polling on manufacturing to heart, not the actual trade policies. Despite efforts by House Democrats to revive manufacturing, the White House is actively pushing the exact opposite agenda with the South Korea Trade Agreement—a deal negotiated by the Bush administration that would offshore hundreds of thousands of jobs and widen the already yawning trade deficit with Korea.

"The Made in America frame works politically," says Wallach. "But to translate it into policy the administration needs to renegotiate the leftover Bush-era Free Trade Agreements with Korea, Panama and Colombia that the International Trade Coalition says would increase our global trade deficit and explicitly forbid Buy America preferences, not push them toward passage and stop pushing back against congressional efforts to expand Buy America government procurement rules in other areas."

One of the primary impacts of the deal will be on the automobile industry, a struggling U.S. industry that employs half a million people. Put simply, the South Korea FTA would deal it a devastating blow. At the end of 2008, the U.S. had a $13.4 billion trade deficit with Korea, $10.5 billion of which came from the auto sector. For every car the United States exports to Korea, we import over 1,000 into the United States.

Passing the South Korea treaty would only widen that gap, because Korean companies can abuse their labor without reprise, cutting costs for executives in the process. The nation currently refuses to comply with international labor rights stated under the ILO Declaration on Fundamental Principles and Rights at Work. Just as troubling, the proposed treaty also explicitly bans key Buy America provisions related to clean energy production—hampering American entrance into a critical new industry while boosting Korean manufacturers with some of the world's worst labor records.

This isn't the first time Democratic leaders have talked the talk on Making It in America while refusing to walk the walk. Bill Clinton famously campaigned against the North American Free Trade Agreement (NAFTA), then aligned himself with Republicans to push NAFTA through over the objections of House Democrats. Outright lies like these have created distrust of Democrats among manufacturing workers in the Midwest. Even though the manufacturing sector is more heavily unionized than other industries, President Obama's approval rating is 11 points lower among households were a family member is employed in manufacturing than a household where no one is employed in manufacturing.

Clinton's NAFTA reversal didn't just breed long-term distrust, it also had immediate political repercussions. The agreement passed in 1994, provoking a strong rebuke to Clinton from House Leaders, including then-Majority Leader Dick Gephardt. It weakened confidence in Democrats' governing abilities by creating needless divisions within the party. Just a few months after the deal was signed, Democrats were swept out of Congress.

Obama is already facing similar divisions today. In late July, 109 Democrats wrote to President Obama asking him for a meeting. The 109 congressmen put it quite bluntly in their letter to the president what they think the treaty will do: "Implementing this pact without major changes to the text will exacerbate the U.S. trade deficit; further erode the U.S. manufacturing base; jeopardize our efforts to guard against another global economic meltdown… Moreover it is simply out of touch with what the overwhelming majority of American people want."

There are other politically and economically sound strategies the Obama team could pursue. Instead of toeing the Bush line with South Korea, the administration could back a plan to overhaul the U.S. relationship with China—a major concern for voters of many ideological persuasions. A great entry point is Chinese currency manipulation. By tampering with the value of the yuan, China is able to effectively create huge, illegal tariffs which make Chinese goods 25-40 percent cheaper than American goods.

Democrats could divide the Republican base if they brought up a bill labeling China a currency manipulator. "Almost half the Republican caucus would vote for a bill like that," said Alliance for American Manufacturing director Paul, who knows a thing or two about counting votes on trade issues from his days as trade adviser to House Minority Whip David Bonior.

So Obama and Democratic leaders have plenty of politically options available if they want to pursue sound trade policies to strengthen the economy. So far, however, the administration is simply performing a public head-fake, while continuing the Bush-era offshoring agenda.

Made in China

(Why are there no jobs? Because they've been sent overseas to cheaper labor.--jef)

***

Learning About Wages from Henry Ford
By DAVID MACARAY

The U.S. no longer makes stuff. In their wisdom, America’s politicians, academics and corporate leaders willingly relinquished our manufacturing base to the Third World. Our trade deficit remains huge, we’re trillions of dollars in debt, our infrastructure (roads, bridges, ports, aqueducts) is begging for repair, and our states and municipalities are going broke.

We’re fighting two expensive wars which, with each passing day, seem to make less and less sense to the public; the gap between rich and poor is widening; our health care system (even with the tepid reforms set to take effect in 2014) is spiraling out of control; and our public education system—once a source of national pride—is scandalously under-performing.

Pharmaceuticals remain one our few growth industries, but much of that growth is fueled by drug companies inventing new diseases (shyness, excessive blinking, etc.) so they can sell us remedies for them. Currently, they’re trying to convince American women that their natural sex drives are dysfunctional, hoping to create a market for female Viagra.

If these are our deficiencies, then what are our strengths? In what categories does America lead the world? Two areas immediately come to mind: childhood obesity and prison incarceration. Addressing our burgeoning jail population, Senator Jim Webb (D-VA) made this observation, “Either we are home to the most evil people on earth, or we are doing something very counterproductive.”

We also lead the world in drug use, lawsuits, graffiti, TV evangelists, junk food, gun ownership, cosmetic surgery, teenage pregnancies, energy consumption, and credit card debt.

Now let us consider China. The Chinese government’s response to the recent strikes in the auto manufacturing industry came as a surprise to veteran observers, particularly those with images of Tiananmen Square still fresh in their heads. Uncharacteristically, the government did not crack down when workers at Foshan Fengfu Autoparts, a Honda parts supplier in Guangdong province, went on strike in June, demanding higher wages.

Instead, the Chinese government stood back and watched. The government stood back and watched even as the dominoes fell, as Foshan Fengfu strike-fever spread throughout the factories of southern China’s manufacturing heartland, with tens of thousands of workers rising up and insisting on higher wages.

Liu Shanying, an analyst at Beijing’s Institute of Political Science, sees the government’s tolerance as significant. According to Shanying, China is looking to promote higher wages not only to close the gap between the rich and poor (which Beijing sees as a potential threat to the Communist Party), but to provide citizens with more cash to spend on domestic products.

Beijing wants Chinese workers to be able to afford more Chinese goods, reminiscent of Henry Ford’s innovative notion of providing workers with wages high enough to afford the Model Ts they were building.

“If incomes won’t go up, how can domestic demand be boosted?” Shanying asks. “Strikes for better pay are very much in line with the big trend of Chinese economic development.” Apparently, staggering, runaway credit card debt doesn’t strike them as a suitable “cure.”

Compare the Chinese view to the knee-jerk, anti-union sentiment found in the U.S. Instead of acknowledging the obvious advantages of a thriving middle-class—and recognizing organized labor’s role in sustaining that middle-class—there’s a scabrous, mean-spirited movement in this country, led by the Republican Party and corporate America, to attack unions.

Instead of rejoicing in the fact that firemen, policemen, teachers and other public employees are still earning enough to contribute to the economy, people are clamoring to cut their wages and benefits, looking to gut the public employee unions just as they gutted the UAW and the Steelworkers.

Our embrace of short-term fixes and our near pathological worship of the stock market—coupled with a quasi-libertarian, every-man-for-himself mentality—have clearly hurt us. When you assault the middle-class, you risk destroying the one constituency capable of maintaining the long-term viability of a robust economy.

The decline in union membership coincides with the decline of the economy. They are interconnected. Without the safety net of union wages, fewer people are able to afford domestic goods and services. The Chinese have figured that out. In fact, they were probably contemplating the United States when they did the math.

The Death of High Fructose Corn Syrup

I honestly can't believe they are doing it, but good for them!

~~x0x~~

The Death of High Fructose Corn Syrup
By Melanie Warner | Mar 25, 2010

The back-to-back, double whammy announcements that PepsiCo (PEP) is ditching high fructose corn syrup in Gatorade along with the results of a scathing new study from researchers at Princeton make it official — allies of the controversial sweetener have lost the war.

For years, the Corn Refiners Association, a trade group consisting of companies like Cargill and ADM (ADM), has been hammering away at the bad press gushing out about high fructose corn syrup. In ads, in the press and online, they argue that the sweetener is a perfectly natural product and that it is no worse for you than regular old sugar.

To which consumers have responded with a collective “Yeah, right.” Con Agra (CAG) is taking HFCS out of its Hunt’s ketchup, Kraft (KFT) is banishing it from Wheat Thins and you will no longer find it in Snapple drinks. It’s all in response to what food companies say is overwhelming consumer demand. “We know moms don’t like it, and they don’t want to feed it to their kids,” supermarket expert Phil Lempert told Ad Age. Last month, outraged San Francisco parents forced high fructose corn syrup out of chocolate milk in the school system. More products are sure to follow.

Rightly or wrongly, HFCS is deeply entrenched as the most popular symbol of the growing consumer distrust of a food system that churns out nutritionally empty, overprocessed foods with a long list of strange, unpronounceable ingredients.

And now the Princeton study gives HFCS foes the scientific bombshell they’ve been looking for, since actual evidence that eating lots of HFCS is going makes you fatter and unhealthier than simply eating lots of sugar is scant. The university reports that rats that ate HFCS gained significantly more weight than those that ate table sugar, even when their overall caloric intake was the same. The fact that the results of this study may be based on inconclusive results and thus not really offer convincing evidence, as NYU nutrition expert and no fan of HFCS Marion Nestle, points out, will likely get lost in the shuffle.

If only the Corn Refiners Association had changed the name of their beleaguered product, things might have worked out differently. Despite its name, high fructose corn syrup is only marginally higher in fructose, which has been clearly linked to obesity and metabolic syndrome, than regular sugar. (The fructose however is not chemically bonded to glucose as it is in sugar and thus more freely available to the body, so that could actually make a difference, though it’s never been proven).

But when you’re trying to tell people that your product doesn’t have a lot of fructose, but it’s called high fructose corn syrup, it’s a bit like naming your new butter alternative Extra Trans Fat Margarine. No one’s going to buy it.

www.FructoseFree.com

Jobs by Sector Tell a Bleaker Story

Jobs by Sector Tell a Bleaker Story

By Armand Biroonak
March 5, 2010
 

The Department of Labor’s employment data released this morning indicates that we are continuing to lose jobs, 36,000 in February alone, although at a much slower pace than this time last year. The danger now is that with the leveling off of unemployment, policymakers and those in Congress will fixate on month-to-month job numbers rather than taking a holistic look at the entire health of the job market.

When looking at the numbers more closely by sector, the picture remains anemic, particularly for the construction and manufacturing industries.



Of the roughly 4.8 million jobs lost since January 2009, the construction and manufacturing sectors combined have shouldered half of all job losses. On the other hand, the retail and leisure/hospitality industries represent about 15 percent of total job losses.

Attention now has turned to the House passage of a $15 billion jobs bill yesterday. Unfortunately, this legislation is woefully inadequate to meet the magnitude of jobs that must be created across any sector, let alone to plug the entire gap of 8.5 million total job losses since the recession began in 2008. This is why a larger jobs bill is needed, and why the U.S. should take on measures such as Germany’s short-time working program that has successfully saved over one million jobs in the country.
These policies are not just good for the here and now though, they set a good foundation so our industries keep valuable, skilled workers as we look to rebuild our economy with greater investment and a strong industrial policy.

The Story of Stuff

Sorry for any pop-ups. I have issues with posting videos on Youtube. I don't have any issues as far as linking to videos other people post there.