Tuesday, January 20, 2009

The Dawn of a New Day

In a few hours from now a it will be the dawn of a New Day. Today we will see the old administration out and the new one in.  With that many hopes are rising.  President Elect Obama will have some very tough days ahead. I hope that many give him the necessary room to do what must be done.  Do not think that his taking office will mean that people will immediately get jobs or that the economy will suddenly turn around.  For that it will take time, patience and a little less greed.  
In my opinion the economic downturn in the US, which sparked the rest of the world, was largely a symptom of greed.  This did not happen overnight nor did it just suddenly start in 2008.  I think that this started much earlier.  It started with jobs being outsourced to foreign countries, creating a trade deficit that continued to grow.  The US at one point in history, that spanned many years, actually manufactured goods.  These goods were used by everyone here in the US, now almost everything is imported and look at where that has gotten us.  Chinese toys made with lead.....

Outsourcing to Mexico because of the cheaper labor and signing NAFTA only made real sense to Mexico in the long run because it created jobs there.  When the cost of doing business in Mexico came up to close to US costs the next new outsource location was found......China.  China with its HUGE workforce of cheap labor and methods of manufacturing facility layouts.  Well look at where they are now, #3 on the largest economy and #1 and #2 are struggling.

Oil......I once heard the outgoing president of a major oil company say "I really don't care if the people are upset about the high price of gas. It could go to $5 a gallon for all I care."  That same president was retiring at the time when the Oil companies had profits in the Billions range in one year.  The Government of Saudi Arabia, who are our allies when it suits them, along with the rest of OPEC were raking in the cash with gas at $130-$140 a barrel.  These countries were building economies on those numbers, did they think that American's or anyone else would not slowdown the consumption?  We did and their prices fell.  Now the US automakers are getting bailed out but why?  Because of the only real manufacturing of large goods in the US is in the Auto business and those companies put all of their money into SUVs.  So if we bailed out GM....can I stop making my car payments now.... cause to me it seems like they are double dipping in my pocket.

The world economy is like a complex ecosystem.  You can not damage one part without affecting the entire system.
So President Elect Obama will try to return balance to the ecosystem and he will not be able to do it alone.  It will take everyone.
Good Luck and Good Day.

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