Shift Happens
Whether these changes are good or bad depends in part on how we adapt to them. But, ready or not, here they come:
1. Post Office. Get ready to imagine a world without the post office. They are so deeply in financial trouble that there is probably no way to sustain it long term. Email, Fed Ex, and UPS have just about wiped out the minimum revenue needed to keep the post office alive. Most of your mail every day is junk mail and bills.
2. Checks. Britain is already laying the groundwork to do away with checks by 2018. It costs the financial system billions of dollars a year to process checks. Plastic cards and online transactions will lead to the eventual demise of the check. This plays right into the death of the post office. If you never paid your bills by mail and never received them by mail, the post office would absolutely go out of business.
3. Newspapers. The younger generation simply doesn’t read newspapers. They certainly don’t subscribe to a daily delivered print edition. That may go the way of the milkman and the laundry man. As for reading the paper online, get ready to pay for it. The rise in mobile Internet devices and e-readers has caused all the newspaper and magazine publishers to form an alliance. They have met with Apple, Amazon, and the major cell phone companies to develop a model for paid subscription services.
4. Books. You say you will never give up the physical book that you hold in your hand and turn the literal pages. I said the same thing about downloading music from iTunes. I wanted my hard copy CD. But I quickly changed my mind when I discovered that I could get albums for half the price without ever leaving home to get the latest music. The same thing will happen with books. You can browse a bookstore online and even read a preview chapter before you buy. And the price is less than half that of a real book. And think of the convenience! Once you start flicking your fingers on the screen instead of the book, you find that you are lost in the story, can’t wait to see what happens next, and you forget that you’re holding a gadget instead of a book. Saving trees, too.
5. Land Line Telephones. Unless you have a large family and make a lot of local calls, you don’t need it anymore. Most people keep it simply because they’ve always had it. But you are paying double charges for that extra service. All the cell phone companies will let you call customers using the same cell provider for no charge against your minutes.
6. Music. The music industry is dying a slow death, not just because of illegal downloading. It’s the lack of innovative new music being given a chance to get to the people who would like to hear it. Greed and corruption is the problem. The record labels and the radio conglomerates are simply self-destructing. Over 40% of the music purchased today is “catalog items,” meaning traditional music that the public is familiar with. Older established artists. This is also true on the live concert circuit. To explore this fascinating and disturbing topic further, check out the book, “Appetite for Self-Destruction” by Steve Knopper, and the video documentary, “Before the Music Dies.”
7. Television. Network revenues are down dramatically. Not just because of the economy. People are watching TV and movies streamed from their computers. And they’re playing games and doing lots of other things that take up the time that used to be spent watching TV. Prime time shows have degenerated down to lower than the lowest common denominator. Cable rates are skyrocketing and commercials run about every 4 minutes and 30 seconds. I say good riddance to most of it. It’s time for the cable companies to be put out of our misery. Let the people choose what they want to watch online and through Netflix.
8. The Cloud vs.Ownership. Today your computer has a hard drive and you store your pictures, music, movies, and documents. Your software is on a CD or DVD, and you can always re-install it if need be. But all of that is changing. Apple, Microsoft, and Google are all finishing up their latest “cloud services.” That means that when you turn on a computer, the Internet will be built into the operating system. So, Windows, Google, and the Mac OS will be tied straight into the Internet. If you click an icon, it will open something in the Internet cloud. If you save something, it will be saved to the cloud. And you may pay a monthly subscription fee to the cloud provider.
In this virtual world, you can access your music or your books, or your whatever from any laptop or handheld device. That’s the good news. But, will you actually own any of this “stuff” or will it all be able to disappear at any moment in a big “Poof?” Will most of the things in our lives be disposable and whimsical? It makes you want to run to the closet and pull out that photo album, grab a book from the shelf, or open up a CD case and pull out the insert.
9. Privacy. If there ever was a concept that we can look back on nostalgically, it would be privacy. That’s gone. It’s been gone for a long time anyway. There are cameras on the street, in most of the buildings, and even built into your computer and cell phone. But you can be sure that 24/7, “They” know who you are and where you are, right down to the GPS coordinates, and the Google Street View. If you buy something, your habit is put into a zillion profiles, and your ads will change to reflect those habits. And “They” will try to get you to buy something else. Again and again.
De-industrialization of America
The United States is rapidly becoming the very first “post-industrial” nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution. It was America that showed the world how to mass produce everything from automobiles to televisions to airplanes. It was the great American manufacturing base that crushed Germany and Japan in World War II.
But now we are witnessing the deindustrialization of America. Tens of thousands of factories have left the United States in the past decade alone. Millions upon millions of manufacturing jobs have been lost in the same time period. The United States has become a nation that consumes everything in sight and yet produces increasingly little. Do you know what our biggest export is today? Waste paper. Yes, trash is the number one thing that we ship out to the rest of the world as we voraciously blow our money on whatever the rest of the world wants to sell to us. The United States has become bloated and spoiled and our economy is now just a shadow of what it once was. Once upon a time America could literally out produce the rest of the world combined. Today that is no longer true, but Americans sure do consume more than anyone else in the world. If the deindustrialization of America continues at this current pace, what possible kind of a future are we going to be leaving to our children?
Any great nation throughout history has been great at making things. So if the United States continues to allow its manufacturing base to erode at a staggering pace how in the world can the U.S. continue to consider itself to be a great nation? We have created the biggest debt bubble in the history of the world in an effort to maintain a very high standard of living, but the current state of affairs is not anywhere close to sustainable. Every single month America goes into more debt and every single month America gets poorer.
Nineteen facts about the deindustrialization of America:
1. The United States has lost approximately 42,400 factories since 2001. About 75% of those factories employed over 500 people when they were still in operation.
2. Dell Inc., one of America ‘s largest manufacturers of computers, has announced plans to dramatically expand its operations in China with an investment of over $100 billion over the next decade.
3. Dell has announced that it will be closing its last large U.S. manufacturing facility in Winston-Salem , North Carolina in November. Approximately 900 jobs will be lost.
4. In 2008, 1.2 billion cell phones were sold worldwide. So how many of them were manufactured inside the United States ? Zero.
5. According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.
6. As of the end of July, the U.S. trade deficit with China had risen 18% compared to the same time period a year ago.
7. The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.
8. According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30% to 10.1 million. During that same time period, U.S. employment at American multinational corporations declined 8% to 21.1 million.
9. In 1959, manufacturing represented 28% of U.S. economic output. In 2008, it represented 11.5%.
10. Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in St.Paul, Minnesota. Approximately 750 good paying middle class jobs are going to be lost because making Ford Rangers in Minnesota does not fit in with Ford’s new “global” manufacturing strategy.
11. As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time less than 12 million Americans were employed in manufacturing was in 1941.
12. In the United States today, consumption accounts for 70% of GDP, over half of which is spent on services.
13. The United States has lost a whopping 32% of its manufacturing jobs since the year 2000.
14. In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th.
15. Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
16. Printed circuit boards are used in tens of thousands of different products. Asia now produces 84% of them worldwide.
17. The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States .
18. One prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.
19. The U.S. Census Bureau says that 43.6 million Americans are now living in poverty and according to them that is the highest number of poor Americans in the 51 years that records have been kept.
So how many tens of thousands more factories do we need to lose before we do something about it?
How many millions more Americans are going to become unemployed before we all admit that we have a very, very serious problem on our hands?
How many more trillions of dollars are going to leave the country before we realize that we are losing wealth at a pace that is killing our economy?
How many once great manufacturing cities are going to become rotting war zones like Detroit before we understand that we are committing national economic suicide?
The deindustrialization of America is a national crisis. It needs to be treated like one.