Mostly for Old Pif.....
Me, ...again!
From arth...@mv.com Thu Dec 31 21:58:15 2009
On Thu, 31 Dec 2009, Me, ...again! wrote:
>
In compliance with copyright fair use, stated at end, my use of parts of
this article are for educational purposes in a public forum.
Old Pif, days ago you said you were worried about this (below).
I will make a few comments, worry, yes, but basically not to worry a whole
lot. Most of the guy's ideas are arguments, and my comments only will be
counter-arguments. You can decide if you like one or the other.
========================================
> http://globalresearch.ca/index.php?context=va&aid=16639
>
> = = = = = = = = = =
>
>
> December 28, 2009
>
> The Long Decline of the American Economy
>
>
> by John Kozy
> Global Research, December 21, 2009
>
> Email this article to a friend
>
> Print this article
>
>
> The official position on the cause of the current financial downturn is that
> it was caused by the reckless practices of financial institutions and the
> failure of regulatory bodies, and it is likely that these were the proximate
> causes, but they were not the ultimate cause. Americans, unfortunately, are
> rarely willing to search for ultimate causes or do anything about them when
> they are found.
My first comment here is that the biggest problem is that this focuses
only on America and not on similar problems of other first world countries
or economies.
My second comment is that the current downturn has little (not nothing)
to do with regulatory laxness, but more to do with herd instinct, panic,
a short term real estate bubble, and unrestrained RE speculation and
"hedge/derivative-type" speculation. I saw it (at least the RE bubble)
coming, too.
> In the 1980s, I was living in a suburb of Washington, DC. One evening, a
> friend and I were walking the streets of Georgetown when we met a group of
> Japanese taking pictures of a building they had just purchased. They asked us
> to take some photographs of them in front of it, which we did. A few blocks
> further along, we observed a group of teenagers drumming on plastic household
> buckets. The kids were very good drummers, but I pointed out to my friend
> that after WW2, the youths of the Caribbean altered abandoned oil drums into
> musical instruments of various ranges and created a new and unique musical
> genre?steel drums. Later over dinner, my friend and I discussed what appeared
> to be a serious decline in America's economic fortunes and culture.
>
> We were not alone in noting this decline. There was much talk and writing at
> the time about how the Japanese seemed to be on the verge of buying America
> and how the quality of products and services delivered by American companies
> had been outstripped by foreign competitors, especially the Japanese.
Considering that this article was dated Dec, 2009, I wonder why this guy
left out the TIGERS, and China, etc.
TQM
> (Total Quality Management) programs, made up of approaches to management that
> originated in Japanese industry in the 1950s, were highly touted. Having
> observed Japan?s success employing quality control techniques, western
> companies started to take their own quality initiatives. TQM, developed as a
> catchall phrase for the broad spectrum of quality-focused strategies and
> programs. The most well-known proponents of TQM are Deming, Juran, Ishikawa,
> Feigenbaum, and the ISO (International Standards Organization).
>
> The success of these programs has been slim. Numerous studies have shown that
> implementing a quality standard rarely improves a company's performance, and
> my own personal experience validates that. I was involved in ISO standard
> implementations in three companies. It was obvious to me that none would
> work, and the first company went bust within three years of acquiring
> certification, the second company also no longer exists, having had its
> assets sold off in a bankruptcy proceeding, and the third is currently in the
> process of being sold.
It would only be rigorous if the guy named the companies so we could
decide what the problem was with companies going out of business.
During this last implementation, I asked to be
> relieved of my work on it because the project was so shoddy, I didn't want to
> be associated with it.
>
> Today TQM talk has almost entirely disappeared from popular literature.
Well, what the hell, if manufacturing is handed over to Chinese factories,
why need TQM? Let the Chinese handle it.
It
> has disappeared along with factories and jobs. TQM citations in the business
> literature began a continuous long-term decline in 1992. There has also been
> a marked decline in TQM consulting firms. "Commitment to TQM appears to have
> been only skin deep."
TQM is only part of managerial buzzwords and buzzthink. The "Harvard MBA"
as "Jesus Christ" (one who walks on water) needs to be replaced with
Dilbert. The managers are out of touch with the underlings and customers,
and in touch with their CPAs, PR agencies, lobbyists, tax lawyers, and
consultants.
> Various reasons are cited for this failure, because anyone familiar with the
> standards recognizes that the best practices advocated themselves are not
> faulty. The reasons cited mainly have to do with American managerial
> attitudes.
In short: greedy-selfish, quick-and-dirty, profit important-all else
unimportant.
The implementations were 'top-down,' imposed from above rather
> than 'bottom-up' so rank and file employees never had a stake in them,
> managements created no follow-up programs to measure effectiveness, etc. And
> all of these reasons are also proximate causes for their failure.
>
> But quality in TQM is often defined as the totality of features and
> characteristics of a product or service that bear on its ability to satisfy
> the expectations of consumers. In other words, quality is "giving the
> customer what he wants." In pre-implementation training, consultants often
> used McDonalds as an example. Every McDonalds' hamburger, no matter where
> made or bought is identical. When this example was presented to rank and file
> employees, they scoffed. They often asked, "What do we need all these new
> policies and procedures for? We're already producing junk." It was not that
> the policy was being imposed 'top-down' that alienated the rank and file
> employees, it was the program's goal. The employees recognized that merely
> producing junk more consistent would not stem the economy's decline, since
> junk never competes well with quality. What really caused the economy's
> decline was the business model adopted by American companies, touted by
> America's orthodox economists, and aided and abetted by the government.
I am sorry but TQM is only part of the problem and the problem is
"American decline".
> Recently, TechRepublic summarized a piece published by Forrester:
>
> Most . . . managers are stumped when it comes to capturing the right . . .
> metrics and then effectively conveying their relevance to management.
> Decision makers tend to focus on the one metric they understand: The cost . .
> . and how to reduce it.
....and...move the factory to China.
This Forrester White Paper reveals the five essential
> metrics for effective . . . managing. . . .
>
> 1. investment alignment to business strategy,
>
> 2. business value of . . . investments,
This is called: "Our corporation is going to create its own bank inside
the corporation and the head of the bank is CFO."
> 3. . . . budget balance,
No, it is called "staying afloat"
> 4. service level excellence,
Called: offshore to India.
> 5. and operational excellence.
PR fluff.
> These five metrics should form the core of a . . . performance scorecard.
>
> But this advice is pie in the sky. Decision makers focus on the only metric
> they care about?the cost and how to reduce it, not the only one they
> understand.
>
> Ideally, companies exist to provide products and services to people. If the
> products and services are good, the companies prosper; if they aren't, the
> companies fail. That's risky, so American companies inverted this model. They
> fed the public the notion, which has rarely been questioned, that a company's
> responsibility is solely the financial welfare of its stockholders.
This is Kamal Prasad's dogma and it is untrue. In theory, yes, but in
reality, not true.
deleted a paragraph
> To ensure that American consumers would buy this junk, a number of other
> policies were advanced?declining employee wages so that consumers could not
> afford to buy more expensive imported produces, unenforcement of immigration
> laws and the introduction of special visas such as H1B1s so that the
> workforce would expand putting even further downward pressure on wages,
> restrictions on the ability of American workers to organize, and finally the
> offshoring of production. None of these policies could have succeeded without
> the complicit cooperation of America's orthodox economists and government.
...and lobbyist influence of our politicians.
> But logically, this business model could not be sustained. As the incomes of
> workers drop, so does their consuming ability.
Yes.
To mask this result, easy
> consumer credit at high interest was introduced, but that would eventually
> bring about consumer defaults. So even the bankruptcy law was changed to make
> it more difficult for debtors to be relieved of their debts. GNP was
> calculated so that all of this consumer debt was counted as productive
> spending which masked the economy's decline. Sooner or later, the current
> economic collapse was inevitable. The nation's negative balance of payments
> became huge as did its deficit. Foreign nations have far more American
> dollars to spend than does the vast portion of Americans themselves. This
> business model has bankrupted the nation.
OK. But, he left out a lot of things, too.
> So now American companies are hoping to sell their foreign-manufactured junk
> in foreign countries. But this hope involves two problematical scenarios. It
> can only succeed if foreign countries also adopt this junky model, and only
> so long as the countries where the junk is being made don't realize that they
> can manufacture and market the junk without the help of American companies.
> The likelihood of either of these is slim.
The problem is the distribution channels (eg. Walmart). To get ChinaMart
stores would mean spending $500 billion to build competing big boxes and
it would take, what, at least ten years? Develop staff?
> First, most of the developed nations in Europe have strong labor movements
> which not only can and often have shut down all economic activity in their
> nations.
How about some examples?
So many of the policies described above which have enabled the
> American model to succeed domestically are not likely to be adopted
> elsewhere. Second, China, at least, has already discovered that it can market
> its products in developing countries itself.
See above.
> So when the American power elite
^^^^^^^^^^^
C. Wright Mills, but there are better examples.
speak of a rebounding economy, they are
> whistling Dixie in the Yukon. There is no economy left to rebound. It has
> been dismantled and exported.
It is an embarassment to read an expectation of company expansion when
Starbucks Coffee plans to double number of shops.
The ultimate cause of America's collapse is the
> entrenched, rigid, faulty ideologies that our nation's leaders have adopted.
> These ideologies placed America on the road to ruin. Foreign policies,
> especially wars paid for by borrowing, have increased the speed of travel on
> this road. And as incomes decrease, so do our freedoms. Future historians
> will someday ask, who lost America? The answer will be the American business
> community, its economists, and its politicians who have adopted rigid
> ideologies. That answer will serve as America's epitaph.
Well, its a bigger story than that.
> John Kozy is a retired professor of philosophy and logic
It would have been more helpful if he had read some economic history and
business/trade history instead of represent himself as an expert in
philosophy and logic. Most of these issues have other components and
secondary effects, and should not be judged out of world context. The
story on finance really needs to look at the mechanisms of banking and
finance, debt, trade deficits, etc. I have read interpretations by
economists who conclude that everything is smelling like roses for the
USA, and I don't buy that conclusion, either.
Society exists only because people do _work_ to support that society. That
work has to be _paid for_ with wages. Workers take that money and spend it
back into the society to buy the _products_ of the work. The decline is
when the jobs and industrial base leaves the country. It might be nice to
cherry-pick the data that show this is OK, but its a bad long run
strategy.
/////////////////////////////////
_who blogs on social,
> political, and economic issues. After serving in the U.S. Army during the
> Korean War, he spent 20 years as a university professor and another 20 years
> working as a writer. He has published a textbook in formal logic
> commercially, in academic journals and a small number of commercial
> magazines, and has written a number of guest editorials for newspapers. His
> on-line pieces can be found on http://www.jkozy.com/ and he can be emailed
> from that site's homepage.
>
>
> John Kozy is a frequent contributor to Global Research. Global Research
> Articles by John Kozy Please support Global Research Global Research relies
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>
Antonio Huerta
> Society exists only because people do _work_ to support that society. That
> work has to be _paid for_ with wages.
Written too much. I am lazy to read. (No, I am not Ol'P.)
Anyway, back on the topic. Contrary to what's written above and what
the majority if not 99.9999% people believe, work is not actually
required for the people to get paid. "Work" is just one of the many
methods to distribute the society's wealth among people. This is just
a most convenient convention. Everyone works to a less or more degree,
and it is hard to pinpoint how much one's labor increased the societal
wealth. If one does not work, the society's wealth does not diminish
noticeably, and this individual can live very well indeed without
working. But the societial wealth has to be distributed in some way,
and the convention, as I just said, is to give to a person
proportionally to his physical effort.
I already suggested quite a number of years ago here at s.r.c. another
methodology to distribute the societal wealth: that's not by how much
the physical effort the person expended, but by how much the person's
consumption is "cool".
In other words, the most "popular" people get more. The least popular
people get less. Actually, the modern western society has already
moved far in this direction: the most paid person is a celebrity (a
movie actor, an athlete etc), and the more the person is "popular",
the more he gets paid. Look, for example, at Paris Hilton: she
socializes the best, she consumes most elegantly, therefore, she gets
more stuff from the society than a geek who cannot organize a crowd
around him and be at the top of the pecking order in the said crowd.
Oh well, what the world came to...
Old Pif
>
> Anyway, back on the topic. Contrary to what's written above and what
> the majority if not 99.9999% people believe, work is not actually
> required for the people to get paid.
>
Right. The managers as a bright example.
>
> If one does not work, the society's wealth does not diminish
> noticeably, and this individual can live very well indeed without
> working.
>
If two does not work, the society's wealth does not diminish
noticeably, and these individuals can live very well indeed without
working.
If three does not work, the society's wealth does not diminish
noticeably, and these individuals can live very well indeed without
working.
.......................................................................................................
If N does not work, then it depends how big N is relative to the
working population and how much they grab from the common coffer. The
relations between those values is very important. N might be quite
small but they can grab quite a lot and you will have what we have in
the US right now.
Me, ...again!
On Mon, 4 Jan 2010, Antonio Huerta wrote:
> On Jan 1, 1:41 pm, "Me, ...again!" <arthu...@mv.com> wrote:
>
>> Society exists only because people do _work_ to support that society. That
>> work has to be _paid for_ with wages.
>
> Written too much. I am lazy to read. (No, I am not Ol'P.)
>
> Anyway, back on the topic. Contrary to what's written above and what
> the majority if not 99.9999% people believe, work is not actually
> required for the people to get paid.
In no way is the food you eat, the housing you live in, the clothes,
entertainment, etc., made by robots.
"Work" is just one of the many
> methods to distribute the society's wealth among people.
Non work transfers of money all depend on taxation, which itself needs
work to be done.
This is just
> a most convenient convention. Everyone works to a less or more degree,
> and it is hard to pinpoint how much one's labor increased the societal
> wealth.
Good point, but if you ever read how fractional reserve banking works and
how the money supply (eg. M1, M2, M3) expand, it all needs work to be done
at least by a majority of people.
If one does not work, the society's wealth does not diminish
> noticeably, and this individual can live very well indeed without
> working.
If you are thinking that the wealthy are rich enough that THEY don't have
to work, then you are right. But, if you don't work, then you'd better
have pension, SS, money in the bank giving you ROI. Welfare has been
scaled back during reform, and UE is limited. Otherwise go on disability
or food stamps? Won't get you very far unless you live in your car or
under the bridge.
But the societial wealth has to be distributed in some way,
> and the convention, as I just said, is to give to a person
> proportionally to his physical effort.
>
> I already suggested quite a number of years ago here at s.r.c. another
> methodology to distribute the societal wealth: that's not by how much
> the physical effort the person expended, but by how much the person's
> consumption is "cool".
>
> In other words, the most "popular" people get more.
Even to become "popular" means some kind of "work."
The least popular
> people get less. Actually, the modern western society has already
> moved far in this direction: the most paid person is a celebrity (a
> movie actor, an athlete etc), and the more the person is "popular",
> the more he gets paid. Look, for example, at Paris Hilton: she
> socializes the best, she consumes most elegantly, therefore, she gets
> more stuff from the society than a geek who cannot organize a crowd
> around him and be at the top of the pecking order in the said crowd.
Well, that IS a point, but then Paris Hilton is better looking than the
ave geek, too.
Me, ...again!
On Mon, 4 Jan 2010, Old Pif wrote:
> On Jan 4, 8:51 am, Antonio Huerta <ahue...@inbox.com> wrote:
>
>>
>> Anyway, back on the topic. Contrary to what's written above and what
>> the majority if not 99.9999% people believe, work is not actually
>> required for the people to get paid.
>>
>
> Right. The managers as a bright example.
>
Also, the rich. Some 25% of all the wealthy people got that way by
inheritance from a relative. Look it up in Forbes.
>>
>> If one does not work, the society's wealth does not diminish
>> noticeably, and this individual can live very well indeed without
>> working.
>>
>
> If two does not work, the society's wealth does not diminish
> noticeably, and these individuals can live very well indeed without
> working.
>
> If three does not work, the society's wealth does not diminish
> noticeably, and these individuals can live very well indeed without
> working.
>
> .......................................................................................................
>
> If N does not work, then it depends how big N is relative to the
> working population and how much they grab from the common coffer. The
> relations between those values is very important. N might be quite
> small but they can grab quite a lot and you will have what we have in
> the US right now.
We still don't have robots, working without energy, lubrication, repairs
and maintenance, collecting our food crops, put in cans, truck to our
doors, cook and serve for us, for free.
Nice idea, though. Even if you have a wife to do some of this, she --
sooner or later -- will want things that either cost money or require help
(=work) from you.