From The Street...
Thursday, October 31, 2002
French Catholics Attack Halloween
By BRIAN ROHAN The Associated Press
PARIS (AP) - Halloween in France took a new twist Thursday, with the Catholic Church sending protesters into Paris and launching a campaign with rock music to refocus attention on All Saints' Day - a religious holiday that falls a day after Halloween.
Television talk shows turned their attention to the subject. Bakeries passed out fliers about the holiday's patron saints, and a small group of protesters gathered outside Planet Hollywood on the Champs-Elysees to denounce the Halloween-mania.
Arnaud Guyot-Jeannin, president of ``The No to Halloween Collective'' was quoted in Le Parisien newspaper as saying his group was comprised of Christians opposed to the commercialism of Halloween, in which ``the monstrous and the ugly is exalted.''
The Rev. Benoist de Sinety of the Paris diocese said the main issue was not the domination of American culture or globalization.
``We wanted to take the occasion to get people to reflect on something more profound than Halloween - the meaning of life,'' he said.
According to the church, Halloween comes at the expense of All Saints' Day, which falls a day later and is celebrated in this majority Catholic country as a religious holiday and a day for families to pay respects to their ancestors by visiting cemeteries.
The Catholic Church has taken the lead in creating a variety of activities it hopes will distract from the costumes and trick-or-treating.
The Diocese of Paris - clearly targeting French youth - has organized a night of rock, reggae and R&B concerts to be held Halloween night in the square in front of Saint-Sulpice Church, which will be kept open all night to take confessions.
The church has also begun selling kits to bakers around France that include a ``secret recipe'' for an All Saints' Day cake. The bakery is instructed to sell the cake at a lower price than other pastries.
The issue was turned into a debate on all-day cable news channel LCI on Thursday, which took callers opinions on the topic: ``For or Against Halloween?''
One caller called it a form of ``American colonization,'' while another said she was alarmed at how quickly Halloween had taken root in France.
Only five years ago, store windows this time of year bore no trace of pumpkins and skeletons. Today, Paris is wrapped in witches' cloaks in the weeks leading up to Halloween.
On the Net:
http://www.gateaudelatoussaint.com/
http://catholique-paris.cef.fr/
Saturday, October 26, 2002
China Effects -
A friend tells me of a company in Chicago that manufactures things using machine tools. Ford and others are no longer the good customers they used to be. "We don't know what to do about China..." says the near-retirement manager. Sell the company and invest in it, I say.
She also tells me of a failing Air Freight company that used to do a lot of business flying expedited parts to various Ford plant locations. They now do more hauling of skydivers.
A fellow on vacation in Bull Shoals is retiring soon from the Ford plant in St. Paul, and says that the redo of the massive River Rouge manufacturing facilities in Detroit is part of management's plan to consolidate manufacturing and close regional plants. Lotsa union fellows will lose jobs.
Ford Debt is Downgraded to Two Notches Above Junk, says a headline yesterday. Hmm..how will Rouge River get paid for?
To compete with the lower wages in China, US manufacturers are trying to cut costs and consolidate. Just-in-time inventory models and centralized manufacturing means fewer jobs for Ford folks, and their suppliers. With internet communications now available universally, and especially in China, their basic asset - low cost labor - can be better leveraged with the comparable "productivity enhancing" tools of their US competitors. Heck, the software for both manufacturing systems was probably written in large measure by Chinese and Indian engineers. Transportation costs plummet, making location of stuff less simportant - be it raw materials or finished goods.
I may go back to China again to get in on this....
China Ascending...
The Daily Reckoning's Dan Denning , excerpted below, writes of data suggesting that China is really starting to move economically. It is the only economy in the world showing appreciable growth.
Here at the hotel I'm in tonight, a "Chinese" girl brings an extra pillow at my request. "Are you Chinese? " I ask in my stumbling Mandarin. "No I'm Mongolian". Hmm..the new Filipinas of northern China. Will ValGals someday be bringing pillows to guests in Shanghai?
Daily Reckoning
IMAGINE YOUR DAUGHTER AS A "Ke4" by Dan Denning
The Chinese symbol for foreigner is Ke4. And Ke4's, traditionally, are not well liked in China. For good reason.
The period from 1644 to 1911 - known as the Qing Dynasty in China - is not a happy one for Chinese nationalists. In the 15th century, the Chinese were forced to build the Great Wall to keep the Mongols out. And in the mid-19th century, they fought two wars trying to prevent Great Britain and France from forcing opium into Chinese markets. The Chinese lost, and were forced to accept humiliating terms and open their ports to Western commerce.
Today, the Chinese again are opening their country to markets, but on very different terms. Today, the Chinese have an advantage. And it would not surprise me at all that if in another 50 years, the sons and daughters of America are serving as nannies, gardeners, or English teachers in the households of the Chinese nouveau riche. Foreigners have always left their home country for better opportunities elsewhere. The United States is filled with people who've done so. We just never expected we'd someday have to send our own kids overseas to find a better job or more opportunity. But we very well might. And a lot sooner than you think.
You've probably heard all about the coming ascendancy of China as a world economic power. Eric Fry mentions it in his notes today. And consider the following from Strategic Investment's Marc Faber: "...most people around the world still grossly underestimate [China's] size, importance, and future potential. Already today, there are more refrigerators, radios, TV sets, mobile phones, and motorcycles in China than in the US, and I have no doubt that within the next ten to 20 years the Chinese economy will become, in physical terms, by far the largest in the world."
Chinese economic production is deflationary. It appears to be a trade-off. Americans get cheaper goods. But we give up jobs for those goods. Chinese cost advantages in labor and production make Chinese manufacturing firms difficult to compete with.
Within the next 50 years, the Chinese will begin consuming too. Their economy will mature. And when it does, a great shift will take place. They will lead the world in exports. And they will also lead it in imports, including, perhaps, America's best and brightest.
Few people really understand the magnitude of this shift. The U.S. has enjoyed such unchallenged economic supremacy for so long that few people can imagine a world in which the U.S. isn't the world's largest economic power. But we took a step closer last week.
On Friday, the latest current account deficit numbers came out. The United States continues to gorge on the world's goods and services. The deficit expanded to a record $38.5 billion in August. It now stands at just over 5% of GDP. And as Morgan Stanley's Stephen Roach told an investment seminar in Tokyo yesterday, "That would mean the US would need to import US $2 billion worth of foreign capital per day [to achieve current account adjustment] - not an easy task with US equity indices at current levels."
In normal economies, this is a problem. Trade deficits usually demand an equal inflow of funds back into the debtor country to prevent the value of the currency from falling. After all, an economy that consumes more than it produces is not a "healthy" economy. And usually, the currency of a sick economy gets punished.
Not so in the United States. U.S. stock and bond markets are still attracting the bulk of the world's investable capital. All those dollars we trade for cheap goods are finding their way right back into American financial markets. And just days after the trade deficit numbers were released, we had two government officials assure us to move along, "there's nothing to see here." Instead of telling us that the trade deficit indicates a sick and chronically indebted economy with severe structural problems, they're telling us it's a non-issue.
In Monday's Financial Times, Richard Clarida, the Assistant Secretary for Economic Policy at the Treasury Department, said, "It is clear from the evidence that the U.S. current account reflects a lack of growth, and growth prospects, in the rest of the world. Moreover, the present deficit in the US current account does not suggest that a change in current U.S. economic policy is warranted."
Translation from the Newspeak: "It's not our fault the rest of the world isn't consuming its way to prosperity. We'll be damned if we're going to stop buying free cars and generally living well above our means through excess credit."
And so here we have the key flaw in U.S. economic thinking. US officials maintain that the U.S. economy is a safer bet than anywhere else in the world. And in that, they might be right.
But they couldn't be more wrong about gains in productivity powering the economy and staving off deflation. Illusory gains in productivity do not solve structural imbalances.
....
There are few permanent things in the world, much less in dynamic economies. The new technology Greenspan lauds as productivity-enhancing is, in fact, deflationary. Prices for computer technology are declining. Major U.S. companies in the telecom and tech sector engage in regular rounds of layoffs to compensate for the huge overhang in capacity.
Lower prices are great for consumers. But why is it taking so long for the government to acknowledge that the introduction of new technologies is almost always deflationary and profitless?
What's more, if there has been a "structural" change in the economy, as the Chairman claims, it's been to employment. America's headlong descent into the culture of consumption has, perhaps, permanently altered the employment landscape of America. We're consuming our jobs away.
Over the last 25 years, employment in services has grown about 10.6% a year. It marks a permanent shift away from America's manufacturing job base to a service base. A New York Times article from late August highlighted some disturbing numbers released by the Bureau of Labor Statistics. The BLS concluded that a large portion of the job layoffs of the last three years are "permanent layoffs." What did they mean?
Almost ten million people lost their jobs between 1999 and 2001. That was 7.8% of the workforce. We've touched before on how this kind of cost cutting is not good for the economy. While it gives one firm a temporary advantage over its competitors, the aggregate result across the economy is less prosperity, not more. One firm's costs are another firm's profits or a consumer's wages. And lower profits for other firms and lower wages for consumers mean less total spending, and eventually lower aggregate profits for the economy.
Only investment in new goods and services creates prosperity. Trouble is, artificially low interest rates have encouraged American households to spend today at the expense of tomorrow.
This bad habit is part of a larger macro-economic employment trend - one that favors China at the expense of the Unites States. The BLS also reported that from May of last year to May of this year, over 800,000 job openings disappeared from the marketplace. That was a decline of 19%. Not only did firms fire existing workers...but they also stopped hiring new ones.
These jobs are being eliminated. And it's having a predictable effect on the economy. For one, as some jobs disappear from the marketplace altogether, it lowers wage pressures. Worried workers are willing to take less in exchange for the security of a job. This keeps wage inflation low.
But more dramatically, the loss of jobs - especially manufacturing jobs - signals an irreversible trend in the American job market. The job vacuum is thus yet another bullet added to the deflation gun...
.....
When it comes to labor costs, the U.S. simply can't compete with China. In the long-term, the U.S. economy is moving away from a manufacturing base and towards a service base. To the extent that this means there will no longer be job-creating investment in capital goods (machines and machines that make machines), the country is actually getting poorer, not richer.
Countries that consume more than they produce can't do so forever. Ascendant economies don't shed jobs, they create them. When you consume more than you produce, you impoverish your children.
Yet economies do not impoverish themselves all at once. They do it one bad debt at a time. And so it may take another 50 years for China to gain her position at the top of the world's economic ladder. And in that time, while many industries will die in America, many new ones will born in China. There are profits to be had in each case.
Friday, October 25, 2002
Bull Shoals Stuff...
New technology communications infrastructure like that in Silicon Valley hasn't come yet to Bull Shoals. Sprint, Verizon, and other "national" services. just don't work here. Cingular coverage is spotty. The case for satellite wireless is tough to make, but in the hills hollows of this part of rural america, it might be the only technical solution - but not an economic one - so folks drive a lot. Roads are good, especially in an election year. Lots of "antique stores" selling the owners' junk to tourists as treasures, but locals participate as well - sort of taking in each other's laundry.
New stuff comes from Wal Mart - especialy the new one in nearby Mountain Home. A behemoth of a building; acres and acres of stuff crowded close and piled high. Barber shops, MacDonald's, optometrists, live lobsters, world class imported cheese, plus everything else you might ever buy. These places have remade economic life in rural districts, and dominate the retail market. Most everything manfactured was made in China...Hmm....see above.
Cheap "new" stuff comes from the job lot, cosmetically damaged, low price places like Dollar Shops and 101 Sales. Some people seem to have to buy stuff - unneeded stuff - if it is a bargain. When it piles up, it passes down the food chain. Enough people to keep "antique" shops and Flea Markets a regular stop. Old used "stuff" has many outlets and finds its way to the Lions Club or other charitable organizations.
Lots of stuff is "valuable" to some, if it was made by dead-or-alive Indians. Paintings, jewelry, artifacts, carvings that "would cost a fortune" in Big Cities, are mere hundreds here. Hmmm....Old salesman in me thinks Who Will Buy this Stuff and Why? If the Contrarians of the Daily Reckining and other places are right, Serious Depression is ahead; but you can still get dented Mango Chutney for fifty cents in Bull Shoals.
Wednesday, October 23, 2002
Margaret for mayor of Bull Shoals...
I've spent the last two weeks in Bull Shoals. Home of the fifth largest dam in the US and now the temporary home of some Special Forces fellas watching it.
Margaret is challenging the mayor in the upcoming election. In addition to the incumbent, the previous mayor is also running in this non-partisan contest. (Not much party identification in all of the statewide and national races either...) With about 2000 folks in town, perhaps 1200 are registered voters; with the expected low turnout of an off-year/non-presidential election, maybe 600-800 will vote. In a three way race, the anti-incumbent votes will be split. But maybe 250-300 votes will win it. A landslide would be 400.
Supporters say Margaret has visited every home seeking support. She has a list of specific things she'll do, including efforts to improve the decaying tourism business. Bull Shoals is a fishing town. Best bass fishing in the country in the lake behind the dam, say some. And the trout fishing in the White River that runs downstream from the dam is superb. But to get lucrative professional fishing contests now takes up-front money to the sponsors. Passing the plate among the local businessmen could get this cash; absent this, the big events have gone elsewhere - both in the state and in southern Missouri.
At the drive in and the diner, some folks say they prefer the incumbent - as least he knows what to do, albeit he's not been too successful. Margaret has business and organizational experience, but has never run for public office. A male relative has run for mayor before here, unsuccessfully, which gives some folks pause. Her red white and blue yard signs with her picture sure look better than the hard to make out black on orange drawing of the incumbent; and there seem to be more of them. Not as many as Carl, of course, who is running again for sheriff. Been sheriff a long time; token opposition. "A truly honest man" is heard about him.
Margaret had a rally at the VFW Thursday night. Maybe a hundred and fifty folks came through, including some ringers from the incumbent's campaign. Everyone had a great time and danced until the10pm closing. No one seemed real agitated about the issues, although they all hoped Margaret would win. She promised not to fire the police chief; nor let the drug dog Vicky go. One sister passed a few years ago, and her twin sister is here helping out; another sister runs the framing store over in Mountain Home. And at 70, she's only beginning her political career.
So it ought to be an interesting two weeks up to election night. Although I'm no Toby Ziegler from West Wing, I think she's going to do okay.
