Manufacturing Update: Foreign investment as an industrial policy?

Hello everyone, happy Monday to you all on Economic Populist. Today marks the return of a series I had put off for health reasons (actually this is the second attempt, sorry). On this inaugural I would like to focus on the foreign investor. As many readers of my past columns know, Manufacturing Monday has been a staunch advocate of building products here. Primarily focusing on promoting our current captains of industry to open up a shop here instead of say Asia or Mexico. Or in getting new (green) industries going. If they (being foreign countries) are "taking" our jobs, how about us getting some from their companies?

A smart kid and KIA

13 States Now Have 10% Unemployment

A picture is worth a thousands words, and this map shows the loss of a couple of hundreds of thousands of jobs. This map shows the current unemployment in each of the 50 states, and in 13 of them, that rate is above 10%.

At least in part, this map shows the immediate impact of the shutdown of much of the US auto industry. With most GM and Chrysler plants idled beginning in early may, a large number of parts suppliers have followed suit. As a consequence, the industrial region around the Great Lakes has seen unemployment jump to heights not seen since the late 1970s.

California's Screwed, Arizona and Rhode Island are too

At this point, many people here are aware that a number of states have deep budget deficits that threaten to bring shutdowns as early as August. I think that throwing some numbers in really shows the depth of the problem as well.

This map shows the gap between expected 2009 state revenues and the budget for the year in percentage terms. California has a real problem, as do several other states.

Economic things I learned or overheard this Memorial Day

I’m a sucker for barbeques, especially good ones.  Normally I’m not a “family” person, but I am a people person.  When it comes to barbeques, though I tend to even go to the ones my family puts out.  This year I hosted, unfortunately the weather was not on my side and being someone into risk management I decided to hold an “indoor bbq.”  The food, as always, was good, but my other type of appetite was also satisfied, my hunger for news and tid bits. 

Its time to kill off the zombies before they engulf us all.


WASHINGTON (Reuters) - Bank of America has been deemed to need an additional $34 billion in capital, according to the results of a government stress test, a source familiar with the results said on Tuesday.

A Bank of America spokesman declined comment.

The amount is far higher than published reports had speculated the largest bank might need. It is certain to increase the pressure on Chief Executive Kenneth Lewis, whom shareholders ousted as chairman last week.

BofA to need $34 billion in capital: source | Reuters

An "immoral" or possibly unconstitutional proposal of sorts

Yesterday I read about how the folks at AIG will be getting their bonuses. Like many of you, this infuriated me to no end. Once more, failed business people gaining reward for their bad decisions. The shareholder has lost most of the value in the equity in the company. The taxpayer (and also now a shareholder) has actually gotten two punches in the gut, including diminishing share value they've also had to put up billions of dollars. Frankly enough is enough.

Manufacturing Update for 3.10.09

Greetings everyone, and welcome to a new edition of the Manufacturing series! Been ill again, so haven't kept up. Rest assured, I'm in somewhat top form now. But enough about me, we got manufacturing stuff to talk about! Some interesting news out there, but first, of course the Numbers!

The Numbers

Times have been tough for manufacturing, we all know this. And the current business cycle has been especially cruel. Month after month of job losses, plant closures, the pairing down of work hours, you name it. In some places, this has sadly been old hat, just ask the folks around Detroit. It's as if you could amalgamate this country's industrial base as a very large person, say back to the middle of the last century, and is now looking like one of those sickly persons one sees in a famine. But could we start seeing a bottoming?

Enough of Everything but Dollars - The Money Party at Work

Enough of Everything but Dollars

The Money Party at Work

Michael Collins

The government bailout of failed financial institutions locks you into years of debt payments in behalf of the large private banks, debts that you did not create.

By all appearances, it also locks the country into years of a weak economy.  That means unemployment, underemployment, and more suffering for those willing to work, but left out of the job market.  It means lowered opportunities for those who do work and troubles for dependants and indigents.  Vital national priorities including affordable health care and the massive effort required to save everyone form calamitous environmental catastrophes are now on hold or under funded.

In defense of securities and derivatives

While recovering from another illness I read an interesting piece on Daily Kos. I originally was writing this up as a response to Billmon's excellent article today, Chocolate Covered Cotton. For the record, he makes some very valid points. The whole system is now burnt, and we the average citizen has to pay for what really is fraud on a massive scale. Saying all this, I have to take issue on the idea on the concept of CDOs, Swaps and the entire idea of securitization of loans being total junk. That isn't to say that whats out there isn't toxic, but I'm looking forward.