Zuma Dogg Speaks on Global Economy For Next Year and Next Decade (Bring an Umbrella!)

Listen people...I just had a flashback to a Deming seminar, and some of the interviews I did for my SCAG article -- and here's the problem:

We have had a much bigger fundamental shift in the global economy than anyone has realized yet.

U.S. LOST MANUFACTURING!!! That was our big industry.

Now I agree with talk of new industries like "green" jobs and future things like that. But that's still very, very niche -- and very, very speculative.

Just because Presidential candidates (from both parties) will show up in Michigan and Ohio and say, "I'll bring the jobs back..."

Hate to cast a cloud over your "optimist parade", but do you really think you are going to reverse the global trend and start producing things cheaper than China who pays their workers two cents an hour. (All the cheap laborers from Mexico can't compete with those wages.)

So right now, the U.S. is doing a lot of building/construction, that now seems to be slowing. And the cheap labor will be used to build the infrastructure that is needed to accommodate all the density LA City Council has approved ("Dumb" Smart Growth).

Whether it's the magic bullet train, mag train, subway to the sea, light rail, 405 expansion...whatever. LA City is a city under construction.

But if manufacturing going overseas is the problem...

Well that's gone. And although there are a lot of new and innovative ideas to stimulate new and future industries that the U.S. can export to the rest of the world...

There will be a painful, painful lag time between when this recession hits -- and an actual turnaround.

In other words, I think you have to measure the time frame of this adjustment to a fundamental shift in a global economy in much more than "months"...or what part of this year things will turn around.

The U.S. economy and industry IS about to become the global underdog...no longer what it used to be...never will...electronic technology and computers have leveled the playing field...

And places like China that have not been playing by the rules all these years, have now put the U.S. at a tremendous disadvantage, because we played by the rules.

Reality, y'all!!!

CHAPTER SUMMARY: Our economy ran out of steam a long time ago, and has been propped up by smoke and mirrors. (Subprime, credit derivatives, overconsumption of needless consumer goods) -- but it's caught up with the U.S. because the base that has kept it propped up (manufacturing) has left -- and all the political optimism is not going to jump start the situation for a very, very long time -- no matter HOW GOOD the idea.

So it's gonna get worse before it gets better, and it's gonna be more like a decade or two, rather than a month or two.

AS CANDIDATE FOR VICE PRESIDENT OF THE UNITED STATES OF AMERICA, HERE IS MY TAKE ON THE U.S ECONOMY OVER THE NEXT DECADE:

#1: Pull the plug on ethanol. First of all, it's corn based -- so it is driving up the price of corn, which is used in many food products and sweeteners. (Like almost all of them!) And ethanol ends up costing more than it saves. And it's all a great idea, but never going to become a long term reality.

#2: Take the fields being used to grow all this added corn for ethanol, and use it to grow wheat which will be a much more profitable crop for U.S. farmers as the global population continues to boom. And as more and more people in global markets like China become wealthier, and start buying meat and chicken based protein, you will need more wheat to feed the animals, as well. (Even though ZD doesn't eat anything that walks, y'all!)

#3. Solar panels and all that stuff. Hell yeah, there's a growth industry. But the material for the panels are made overseas, but the installations and money saved by the energy conservation is a step in the right direction.

4#: Look for the trend to go "generic" and "basic" again. People will not want to be paying higher prices for brand name lables. When you have the generic product, next to the brand name on the shelf, people will be grabbing the lowest price "off brand".

5#:: Auto industry in big trouble. Next big shoe to drop like the housing market. In tight economic times, people will be able to wait another six months or a year to buy an new car, as opposed to "bling" upgrades.
If it don't go through your mouth, or used to keep your electric devices on (utilities), you're gonna feel like the Maytag repairman for a long, long time.

#6: Good-bye mom and pop shops. Clothing, hardware, general retail, restaurants, small businesses will all be suffering hard times as the mega-stores continue to consolidate the retail market. (See Target, Best Buy, Wal*Mart, Home Depot, Costco.)
And with banks tightening down on who they loan money to (unless you are Bill Gates or Warren Buffett, you got no shot), don't expect small business to jump start the economy. All of these people who used to own or manage the hardware store, will now be working as a clerk at Home Depot, instead. And the big stores mentioned above will be in trouble, because everyone is getting bumped down a notch, socio-economically.

#7: Middle Class will continue to get squeezed. And those barely hanging on to middle class status will be bumped down to lower-income/class. (In Cleveland, there are now more and more vacant homes; and more and more homeless now on the streets as the homes sit vacant. L.A. is going to find this to be the case, as well.) We are moving to more of a two-class system. Where the rich will be fine, and everyone else will be worse off. And the mom and pop middle class will be squeezed downward.

#7: Besides green energy industry (a long term, slow growth possibility), what could be the industry U.S. can export to the global economy since it isn't autos and widget manufacturing anymore?

Besides real estate agents to sell all this devalued housing and commercial property that will be snapped up by oversea millionaires and corporations: Corporate infrastructure is the only answer. In other words, health care systems, computer networks and infrastructure for financial institutions, insurance companies, banking institutions; the U.S. has to become the provider/consultants/trainers to show the rest of the world how you build everything AFTER you build the concrete infrastructure. (Corporate infrastructure.) Take Dubai for example. They are building some $500 billion dollar SuperCity, that will be like a "green" resort mega town (better than Vegas). Who's the first architect they hire to build their museum? Frank Gehrey.

It ain't gonna be easy, and please be ready for a longer lag time as the world adjusts to the global shifts that have occured as the U.S. lost the manufacturing industry since Japan started taking over in the 50's and 60's, and then China...and now the whole damn planet. We haven't even figured out the next step yet, let alone take the first step; and political optimism and minor stimulus packages are not going to fix it.

When you turn the wheel of a ship, there is always a lag time between the time you turn the wheel, until the ship starts to turn. And the U.S. hasn't even come out of the spin yet, let alone turn the wheel.

See you at the taco truck at the flea market!

ZD responds to reader comment on this article:

"Let’s start with the manufacturing of consumer electronics good. We just need to build modern automated factories with less manual labor involved in the manufacturing process. Don’t forget that this country was the leader in the development high tech electronics."

[Can't argue with that. I don't hear the politicians pushing this, though...is it a reality in the works. GE will have success building these gigantic turbine engines oversea nations need to further kick out ass. So maybe more factories like these, indeed.]

"We may not be able to manufacture as cheap as China, but if the U.S. consumer were educated as to why we should buy our own products and have jobs, we can sell U.S. manufactured electronics. Americans did not go broke buying American made T.V.s back in the 70’s, at a higher price."

[Hmmmm...not sure it's realistic to think that we can turn the clock back to those times, because the public will always chase a lower price, so unless you restrict imports and turn the U.S. into a bubble, it'll never fly. PLUS, if we become too protectionist, China will dump massive amounts of dollars and sink us. (We are definitely at their economic mercy more than most people would be comfortable in knowing.)]

I don't wanna disagree with your comments, because in theory it would solve much of the problem...but I'm a little more pragmatic in feeling we can't put the toothpaste back in the tube.

And another long term problem we face is with a 50% drop out rate in many major U.S. school systems (and not all the ones graduating are setting the academic world on fire, either), Asia will be producing more scientists and math geeks needed to invent all these new innovative "robotic" automatic factories you suggest.

And bro, don't think you are gonna school me on this topic in the combative way you suggest. For your bigshot, "Have to give ZD a lesson", the only thing you really gave me a lesson on is Archie Bunker, good old days non-reality.

YOU LOSE, CARL MILLER! (as usualoser.)

Related ZD articles: LA cracks down on illegal vending

More related ZD articles: LACityUpdate.com (See articles on lower right hand column.)