30 Years of Hiding the Salami

[don]

We've seen a steady loss of the means of production in America over the last 30 years. What's never explained is the essential difference between production enterprises, manufacturing needed goods, and the service industries. A 30,000 production job enterprise can support a city of 200,000. Hair stylists, retail shelf stockers, oil changers, etc can buy each other's services and when that's the whole local economy, you end up with today's Flint, Michigan.

The SF Chronicle's coverage of the Nummi plant closing is typical of the last 30 years as well.

With financial Armageddon looming, gloom on the assembly line and nothing resembling relief in sight, Grant Morlock knows exactly how he's going to cope with the shutdown of the Nummi auto plant where he has worked for 25 years as a design troubleshooter.

"I'm going to go bowling," he said, eyeing the busy lanes at Cloverleaf Family Bowl in Fremont's Irvington district, just a few miles down the road from the plant. "What else can I do for now? There are no jobs anywhere, just papers to fill out."

Morlock sighed, then smiled as he watched a player's ball smack a cluster of pins. There was a time in the 1980s when Nummi was new and Morlock and his friends bowled at Cloverleaf on one of 80 teams that came from the auto plant. Just being in the alley still brings back good memories, he said.
Now, though, there are no Nummi bowling leagues. Everyone's tense at work. And as of Thursday, when the last clanging machine falls silent, there will be no Nummi. No friends working together.

No future.

"Yep," Morlock said, striding toward the lanes. "It's time to go bowling."
More than 25,000 other workers associated with Nummi and businesses and cities all over Northern California that depend on those paycheck-toting workers are facing the same problem this week. It's not going to be pretty - not for a long time, experts and community members all over the region agree.

In Chronicle-ese, sad, but will Grant find work at the mall?

[Rajiv]

Re: 30 Years of Hiding the Salami

A logical result of the breakdown of the gold and silver standards as I stated here

[radon]

Re: 30 Years of Hiding the Salami

A logical result of the breakdown of the gold and silver standards as I stated here

More the result of a continual increase in automation combined with global wage arbitrage. If you didn't allow the dollar to depreciate things would be more expensive to make here, not less.

[ThePythonicCow]

Re: 30 Years of Hiding the Salami

In Chronicle-ese, sad, but will Grant find work at the mall?

The Great Mall of Milpitas, just down Highway 17 Interstate 880 (they renamed it in order to qualify for Federal funds for a widening project) from the NUMI plant, was looking pretty barren the last I was there.

However that was a couple of years ago; perhaps things are looking up there now ;).

[Rajiv]

Re: 30 Years of Hiding the Salami

Not at all. As pointed out by me earlier, there are two economies existing side by side -- the local economy, and the international trade economy. After WWII, the accounting of the two economies was separated -- one was on the silver standard (the local economy), and the international economy was on the gold standard. Labor costs are always based on the local economy. The international economy consisted only of trade in goods that were not available locally, and therefore always a subset of the overall societal trade.

When monetary supply is constrained by PMs, there is no infaltion -- in other words, the bankers are not able to create money at will. A shift in gold from one participant to another will cause only the prices of goods trade in the international markets to fluctuate, and will not have too much of an impact on the local economy.

I discussed the above fact over here

Originally Posted by Sharky
Another point: much of the world works for less than US minimum wage, and survives just fine. What makes Americans so special that they can avoid economic reality? And why would it be considered so horrific for the US to act like other countries do when it comes to wages?

This is actually not quite true. Let us take the California Minimum Wage $8.00 per hour -- and transport that to somebody in India -- the living standard of that person earning $8 per hour (in purchasing terms and standard of living) is equivalent to that of somebody earning $80 per hour -- in other words >$160,000 per year, and would be in the top 5% of income earners in India just as $160,000 would be here in the US.

You say -- how is that possible -- it is because the exchange rate is determined purely by Internatonal trade and the printing of money by the FIRE sector -- it does not reflect the realities of life on the ground. The markets in this regard are extremely imperfect and subject to externalities. This another way for FIRE sector to shift money from the 90% of the US population to the the top 1% -- an empoverishment of the US population by the US financial elite.

[radon]

Re: 30 Years of Hiding the Salami

When monetary supply is constrained by PMs, there is no infaltion

That must be because the supply of PMs is absolutely fixed. Do the supply and quality of goods and services remain unchanged?

A shift in gold from one participant to another will cause only the prices of goods trade in the international markets to fluctuate, and will not have too much of an impact on the local economy.

Unless the market is completely isolated currency prices can't help but have an impact on the local economy.

I discussed the above fact over here

Yeah I read that too.

Blaming fiat currency for the decline of an industrial area ignores the structural changes produced by the expansion of global markets and efficiency gains through technology.

[don]

Re: 30 Years of Hiding the Salami

That must be because the supply of PMs is absolutely fixed. Do the supply and quality of goods and services remain unchanged?



Unless the market is completely isolated currency prices can't help but have an impact on the local economy.



Yeah I read that too.

Blaming fiat currency for the decline of an industrial area ignores the structural changes produced by the expansion of global markets and efficiency gains through technology.

and in no way addresses the political economy, not to mention overproduction and competition between first world states.