Replies

[taxthedeer]

Does anybody know the status on any of these three?

[Commuter]

I don't have to do secondary research.

Primary research (what you see today, as in now) on what happens to a post-industrial rust-belt town is sufficient.

I read the papers. In LaPorte, people are up in arms about a food storage development at Kingsbury -- fearing that big trucks will ruin the ambiance of downtown LaPorte.

Michigan City has the same problem. People want manufacturing jobs to come back. They want clean air and peace and quiet. They want low crime and good schools. But Michigan City (like many other towns in this demographic) hasn't delivered. It's a scary place to be (the position, not the town).

Last time I looked, manufacturing jobs in the USA DO NOT EXIST unless the factory's output is either too time sensitive (fresh foods, Just-in-time products/demand products) to risk spoilage/time irrelevance on a container ship/train/truck from the Far East, or the output has to be made in America to satisfy some government requirement for raw materials/production sourced in/from the USA (translation: anti-competitive protectionist subsidies).

Beyond that, a company's labor expense in the USA is just too high to be competitive when labor costs in China and India are a tiny fraction of even NON-UNION wages here in the USA (source: US Bureau of Labor Statistics).

After WWII, European manufacturing capacity was pretty much destroyed. The USA was the only game in town. From 1948 to the mid/late 1960s (but with decline beginning in the late 1950s), the US had a near monopoly on manufacturing for global markets, while Japan and Europe rebuilt.

Since 1970, US manufacturing as a percentage of global production has shrunk. China and most Pacific Rim countries were good for textiles, spices, and exotic woods and that's about it -- until American/European entrepreneurs realized the commercial potential of creating the world's goods for a fraction of the labor costs (and fraction of regulatory, liability, human rights, environmental costs) of developed countries like the USA.

Enter China (population 3 billion) and India (population 1.3 billion) compared to the USA's paltry 290 million population and the handwriting was on the wall for us.

Today, our total hourly averagel labor costs are among the world's highest -- upwards of $35 an hour.

Japan, once the only real competitor to the USA, comes in at about $27.80. Taiwan comes in at about $8.68. Philippines, $1.68. China's coastal manufacturing costs are about $1.30 -- which is about 30% higher than 2008 costs -- since the new middle class over there and new domestic economy has put upward pressure on domestic wages. Did you know that the big three sell more cars there than here but the average wage is still less than $2 an hour? India still comes in even LOWER -- at about $1.00 an hour far inland.

Now, I believe that Federal Mogul/Anco just ceased operations here. I believe they are moving to Mexico -- where the average labor rate is around $6.

Read all about it here: http://www.bls.gov/news.release/pdf/ichcc.pdf

I didn't even go into child labor rates, but you can read all about THAT here: http://www.nationmaster.com/graph/lab_chi_...e-manufacturing

In other words, manufacturing won't be coming back here unless Americans learn that just about everything they buy is manufactured by people who might as well be slaves by our standards -- in wages, hours worked, output demanded, benefits received, job security, job safety, environmental safety, civil rights, freedom to move, freedom from exploitation/sexual harassment etc.

In short, don't hold your breath -- the jobs ain't comin back here unless something terrible happens over there.

The nice part is that if you are into stock, most if not many of the countries that manufacture there are OWNED here, so you can at least have some ownership equity (dividends) to supplement your income -- and just look the other way at the ages of the people whose efforts make the green flow more comfortably into your portfolio.

So, Michigan City did something wise. They allowed a casino. AT LEAST we have a casino. And a marina. And we have a nifty railroad that gets all kind of federal, state and local money. And some heavy industry thanks to the railroads. And proximity to Chicago to attract shoppers. These visitors buy gas and food and get speeding tickets and buy real estate and help contribute.

We'd probably get MORE people moving here if the schools didn't SCUK. But they do and they always have. Michigan City (in my humble opinion) has always been a school system that seems to attract creeps -- so that the actions of a few taint the good intentions of the majority. I DO hope that changes.

If they could do a good housecleaning and get the creeps out the school system, that might interest people to at least move here.

Since manufacturing WILL NOT be returning here in all likelihood, we have to look at alternatives.



Why NOT allow a strip club? It's better than a tombstone.

[Tim]

Why NOT allow a strip club?

Plenty of reasons. Research indicates that.

But I guess you don't have to do that.