One of the worst hits states is here in Ohio.
Reasons?:
Manufacturing has went to ****.
Good paying jobs lost by millions.
Wages of existing jobs being slashed by as much as half.
Healthcare rising, Insurance coverages dropping.
Gas hitting over $3/gallon, raising the price of everything else as well.
Middle class dissapearing...

Then add:
leander buyouts,
balloned payments
adjustable mortgage rates soaring

What you get is, not just crazy laxed lenders, but good people hit hard from both ends, giving up.

 

If a car is financed, the bank is going to require insurance. If you drop your policy your insurance company will let the bank know and they'll just put forced placed insurance on it, just like with a home mortgage.

 

It would have been real interesting to see what would have happened to the "Goldilocks economy" had consumers decided to engage in rational spending over the past 6+ years. My guess is that a bit more savings and a bit less spending by the "normal people" would have resulted in a world of pain for the fat cats.

 

What's funny about that?

The only thing goofy is that they would jump into a big payment situation in the first place (which many people do) - for that they sure get a doofus-award. IMO, most folks who are "lower-middle" or even near poverty level buy the $400 car that is on it's last leg because they don't have the credit to buy anything on terms anyhow.

There are people in my plant that are making $8-$10/hour and trying to raise a kid or two. Mortgage, food, healthcare come first, then come the power bills, water bills, phone bills. and somewhere in there you need to drop $50-60/week on gas money. If you make $10/hour on an 8 hour day you gross $80.
Take out %30 in taxes and you barely have enough for a tank of gas after your 8 hours.

I honestly do know people making such decisions, and it is not a light-hearted issue.

IMO, no person in the USA that is working and honest should have to make such decisions. There is always financial responsibility no matter what you earn, but survival should not be a challenge for the normal hard-working blue collar guy.

Now - outside of the soft-hearted lecturn, I stopped by the Ford dealership this weekend to check out some of my handiwork, and made a couple of really ugly observations...

1) The prices of the SuperDuty trucks has gone ballistic... insane actually. When trucks start crossing the $60k barrier - something is wrong. When 250 SDs that are basically work trucks creep into the deep $30k's... something's wrong. A truck like my '96 (optioned almost identically) cost $12k more than mine did a mere 12 years later. That's $1000/year average increase in price - or about $100/month loosely speaking.
How in their right minds do they justify tacking $100/month on MSRP?!?!
Thank gosh for the F150 and the "el-cheapo" versions of it or nobody would be able to afford a truck anymore.
$63,487 for a King Ranch F-350 diesel 4x4 quad cab.
Speaking of the $1000/month car payment... $63,000 at 0% for 60 months - there you go.

2) Price gouging is still going on with GT500s and Roushes and Saleens... rampantly. I choked it down while looking at new ones, BUT - when I saw an '07 GT500 with 7200 miles on it and they STILL have a $10,000 "Availability Adjustment" sticker in the window - I went ape-sh1+. The dealer got their first $10-15k when the car sold new. Now somebody trades it in and they are going to dip the bucket AGAIN! That's $25k the dealer made on this car by selling it twice, and that does not include regular markups and factory cash. If anyone pays it, they deserve to be separated from their money.

3) The only thing I saw that looked decent on the lot was the offer for 0%-60mo financing. There were no discounts, no sales, and no specials at the moment. I sure hope Ford is turning profits with this new game plan... I know their dealers sure are.

 

Hold the phone there big daddy... I take the blame for my fair share, but I'll be danged if you are going to pin offshoring of products due to greedy executive decisions on my back. I have fought the manufacturing exportation tide since it began. Ironically, not for the financial reason eaither, but for security and sovereignty.

Do you know the berets that our soldiers were wearing on their heads were made in China? Does THAT make sense? Blame that one on me too?
http://news.bbc.co.uk/1/hi/world/americas/1308090.stm

This kind of sh1+ has GOT TO STOP!

The elite that run our nation's biggest companies and the federal government have too much financial incentive to "save a buck, no matter what the cost". My position is that when you outsource the work, you lose control of it and it becomes a weakness in your armor.

I fought (and still fight) outsourcing for 2 main reasons...

1) Manufacturing is the conversion of raw natural resources into a tangible or sellable good that has more value than the sum of it's components. I.E. it generates wealth from raw materials. Without that conversion, you are simply a handler of the goods and your "cut" is dependent on your need to be there. A service-based economy does NOT generate wealth - it simply shuffles money from one hand to the next. This is why nations that have little or no natural resources have little or no manufacturing and little or no wealth. IMO, we (America) will end up on the auction block for China and Japan as they will be after our resources in decades to come - our coal, iron ore, minerals, copper, graphite - all for sale to the highest bidder (if they don't simply foreclose on the trillion$ in debt we owe them).

2) If you control your own flow of goods from natural elements to finished product, then nobody can screw with you. Look at our dependence on oil as a good example - are we being "screwed with" on that front?
Would you want to have to order your Army's boots, fatigues, support gear - and maybe even their guns - from China? What about tanks and ships and submarines and choppers and warplanes, etc?
What if we go to war tomorrow and need gobs of these things... do we place an order and wait for the ship to arrive in Long Beach, CA?
What if China is the very nation we end up at war against? You think we'll get our orders?
Using the military is an extreme example, but it is not out of the question (see link about berets). Same principle applies to household goods too. The more we relinquish control of our manufacturing infrastructure, the more vulnerable we become to global demand and market pressures because we are vying for the same goods as everyone else on an open market.
I'd rather see us making the goods and competing in the market to SELL them rather than buy/consume them.

So in summary, yes, I accept responsibility for the gas I buy, the fuel I use, and the occasional cheaper product I find on the shelf at WalMart or KMart, but don't think for a second that I don't scrutinize what I buy and look for the "Made in USA" labels because I certainly do. Likewise, I always keep a VERY KEEN EYE on the execs and CEOs that are ready to throw work offshore to save a buck.
You and I have our fair share, but I'm not the equal driving force that execs and policy-makers are, nor am I getting the riches from the decisions either.

 

Proud, I think what he is trying to say is that if the average worker was not demanding $30/hr for bucking rivets with full coverage health insurance, retiree medical insurance and pensions then the draw to off-shore manufacturing would not have been nearly as strong.
I don't blame anyone for it. If you can get that good of a deal at the time who wouldn't take it?
Now with the global economy and the competition sells the same stuff at a far cheaper price you have to do something or you go out of buisiness ( IE the steel industry).
Our standard of living has risen so much that we can no longer produce goods at a price that people are willing to buy them when one made in china sits on the shelf at half the price.

One thing I do blame the average person for is not saving enough. The last time I heard the national savings rate was negative. We all want what we want and buy it on credit. Now with the mortgage crisis and its effects rippling into the rest of the credit market maybe some people will wake up. I doubt they will. We are still a nation of instant gratification and wanting everything that we can't have.

 

I'm still waiting to see all these low, low prices that will come from the global economy. All I see happening to most folks is that wages drop and prices keep going up. Somebody's definitely stacking some paper in the global economy, but it ain't you, me, or Joe Sixpack.

 

If we are supposed to be a superior economy, dont we have to continue to down slide to the middle to completely buy into the "Global Economy?"

Imagine the top 100 countries in GDP. Dont we have to all slide down to the mean of the top 100? And the countries that are sub 50 climb UP to the mean GPD?

I dont see any reason a superior economy needs to shed its jobs to save a dollar.

 

Its not so much the wages as it is the government overtaxing and over regulating companies that drives them away.

 

Wasn't that one of the reasons DCX decided to headquarter itself in Germany, the corporate tax rate is lower (might only be for the auto indistry), but I remeber hearing on talk radio they saved a good chunk of change by doing so at the time?

 

Tru'dat, I think adjusted for inflation, most people haven't gotten an appreciable pay increase (meaning a pay increase that out paced inflation) in the past 30 years.

 

That was my biggest problem with the "current" globalization.

To me, it's like, your neighbor is up to his waist in quicksand, and you're told you have to wade in, off of solid ground, to try to pull him up.

We must've all been thinking of the same thing, as in the high prices, lately.

I was just wondering yesterday, how long it would be until the price of a new vehicle hits that "critical" point. Where consumers can, or will, no longer pay more.
When cars like Cobalts, hit $30K? Work trucks break $30K-$40K?

AND, if all the costs are being passed on to consumers, WHY not some of the savings?

Save $5K on building a new car? Why don't the price drop a grand or two?

If I may? (some opinions..)

There's still the healthcare issue, most other country's governments pay for theirs.( Not that I really know if I want that here)...BUT it's a major savings to companies.

And, there's the EPA issues; they don't have one, we do.

Retirements, and pensions; they wouldn't even know the concept, we have legacies.

Job Health and Safety Organizations; we have, they don't. If all their workers die from cancer after 20+years, noone will hear about it.

And even if our wages were $15/hr, in their eyes, a good case could still be made to outsource, based on the above issues.

 

It's not taxation (corporate taxes are for suckers - and besides, they still apply to profits made on imported product), and it's not really regulation (a PITA but not as costly as many think) - it's wages. The direct labor costs are obviously lower with outsourcing, but what most folks don't appreciate are the savings in indirect/overhead costs. And that's where it should get really scary for the middle-class - what happens when you start outsourcing all those manufacturing engineers, quality engineers, material handlers, production schedulers, and so on?

 

Guys, it isn't just the "fat cat" execs who make greedy decisions to line their own pockets. Remember, those fat cat CEOs (and their politician buddies, as it were) answer to someone...the stockholders (and the voters). That would be you and I...



When jobs are outsourced to increase the bottom line for the company, it isn't just so Mr. Big Shot can give himself an extra $10 million bonus. It's because the damn stockholders are breathing down management's neck to increase the profit margin by a 1/2 a percent...

 

You don't own "any" shares in any company that comes close to what CEOs and major investment orgs hold. You are an insignificant spec in their shareholder file. Me too.
I worked for Tyco Electronics for 6 years and saved like crazy - bought 100% company stock for a good while with my 401 elections. I hold almost 8000 shares of Tyco right now. Know what kind of clout that gives me during votes? DIDDLY.
Don't get me wrong... I definitely send in my proxys with my votes on them, but the votes always turn out going the way "the board recommends" regardless of how I vote.
Look how my measly shares stand-up against the big guys... http://finance.yahoo.com/q/it?s=TYC
GROMER JURGEN W K Officer 475,000 shares bought via option
GROMER JURGEN W K Officer 710,259 shares sold via option @ $32/share
PILLMORE ERIC M Officer 240,000 shares bought via option
PILLMORE ERIC M Officer 240,000 shares sold via option @ $33/share
MEELIA RICHARD J Officer 275,000 shares bought via option
MEELIA RICHARD J Officer 275,000 shares sold via option @ $31/share
There's a slew of them like this - I can't copy/paste them all!

Now let's start talking about the investment groups and hedge fund operators that buy/sell hundreds of millions of shares every day and leverage their buys/sells for financial gain only - NOT the interest of the company they are buying/selling.
http://finance.yahoo.com/q/mh?s=TYC
TOP INSTITUTIONAL HOLDERS

Holder/ Shares/ %/ Out Value*/ Reported
CAPITAL RESEARCH AND MANAGEMENT COMPANY/ 40,715,890/ 8.22/ $1,805,342,562/ 30-Sep-07
LEGG MASON INC./ 35,923,420/ 7.25/ $1,592,844,442/ 30-Sep-07 /
DAVIS SELECTED ADVISERS, LP/ 31,831,130/ 6.42/ $1,411,392,304/ 30-Sep-07 /
FRANKLIN RESOURCES, INC/ 17,746,512/ 3.58/ $786,880,342/ 30-Sep-07/
Barclays Global Investors UK Holdings Ltd/ 15,779,189/ 3.18/ $699,649,240/ 30-Sep-07/
STATE STREET CORPORATION/ 14,717,230/ 2.97 $652,561,978/ 30-Sep-07/
VANGUARD GROUP, INC. (THE)/ 14,245,571/ 2.87/ $631,648,618/ 30-Sep-07/
HOTCHKIS & WILEY CAPITAL MANAGEMENT, LLC/ 13,717,878/ 2.77/ $608,250,710/ 30-Sep-07/
DODGE & *** INC/ 13,388,018/ 2.70/ $593,624,718/ 30-Sep-07/
AXA/ 11,995,893/ 2.42/ $531,897,895/ 30-Sep-07/


TOP MUTUAL FUND HOLDERS

Holder/ Shares/ %/ Out Value*/ Reported /
DAVIS NEW YORK VENTURE FUND/ 13,249,076/ 2.67/ $545,464,458/ 31-Oct-07 /
INVESTMENT COMPANY OF AMERICA/ 11,540,025/ 2.33/ $511,684,708/ 30-Sep-07 /
GROWTH FUND OF AMERICA INC/ 11,303,475/ 2.28/ $501,196,081/ 30-Sep-07/
DODGE & *** STOCK FUND/ 7,568,800/ 1.53/ $300,102,920/ 31-Dec-07/
LEGG MASON VALUE TRUST/ 6,904,000/ 1.39/ $306,123,360/ 30-Sep-07/
TEMPLETON GROWTH FUND, INC./ 6,500,000/ 1.31/ $287,040,000/ 31-Aug-07/
VANGUARD 500 INDEX FUND/ 4,674,616/ .94/ $207,272,473/ 30-Sep-07/
WASHINGTON MUTUAL INVESTORS FUND/ 4,423,750/ .89/ $196,149,075/ 30-Sep-07 /
SELECTED AMERICAN SHARES INC/ 4,055,566/ .82/ $179,823,796/ 30-Sep-07/
NEW PERSPECTIVE FUND INC/ 3,678,125/ .74/ $163,088,062/ 30-Sep-07/

Cool to know that for a mere 163-million investment, I could have .74% of the vote for that company.
I'll rule the roost from the investor's meeting!

Yeah... it's me that's calling the shots and making the big returns on stock alright.




Disagree respectfully.
Mr. Bigshot is out for Mr. Bigshot, and only Mr. Bigshot.
He realizes that other folks are going to have to get a little bit of the pie too, but he will get the overwhelmingly HUGE piece of that pie alone, and after he gets it, he won't give a sh1+ what happens to the rest of the folks or even the company itself, because he will have "made it". Hence, all of the golden parachute deals that are proliferating in corporate America. It's a "no lose" deal for the right big-wig.
I could live incredibly well on a million or two, but these guys are sacking 10's and 20's of millions at a time - every year. They will never have to worry about money - ever.

Again, it's a really cool facade to claim that we need to provide a return to "the shareholders", when in fact you and your club of cronies constitute the majority of "the shares".

Hey - I like you and everything, but you need to not let the dog and pony show bamfoozle you with respect to who is holding and controlling the shares in big companies, and what heir motivation is. You also need to study the Enron case, the RJ Reynolds case, Tyco International, CICSO, and another handful of cases that have already been exposed for their ability to create and execute their own policy to leverage control of stock and to control stock prices for personal gain.

Example ---> http://www.citizenworks.org/enron/enron_fact_sheet.pdf
"At Enron, the focus was on the stock price. Employees were encouraged to load up their portfolios with company stock, and many did. But while top executives were enriching themselves by selling their overvalued company stock , they assured employees that the same stock was still a “great bargain.” Between October 19 and November 13, employees were prevented from selling their stock due to a “change in retirement plan administration.” During this period, Enron announced that the SEC had opened an inquiry and that the company had overstated profits by $586 million over five years. The stock, once valued at almost $90 a share, plunged from $26.05 a share to $9.98 a share while employees were forced to hold their stock.
$1.2 billion: Amount 20,000 Enron employees lost in their 401(k) plans as company stock fell from almost $90 to pennies a share .
$1.1 billion: Amount a handful of executives made in sales of Enron stock prior to the company’s demise.
$30 million: Former CEO Jeffrey Skilling’s profit from Enron stock sales in 2001.
$30 million: Former CFO Andrew Fastow’s profit from the partnerships he created.
$475,042: Former chairman Ken Lay’s annual estimated pension, not including $12 million in pre-paid life insurance.
Lay sold $25.3 million worth of Enron stock in 2001"

Funny how the first two lines are almost equal, but one is how much the peeons lost while the other is how much the "handful" of execs made, huh?