U.S. MANUFACTURING DECLINES TO LOWEST LEVEL SINCE 1948
January 3rd, 2009Via: Bloomberg:
The decline in U.S. manufacturing deepened in December as demand for such products as cars, appliances and furniture reached the lowest level since at least 1948, signaling further cutbacks in factory jobs and production this year.
The Institute for Supply Management’s factory index fell to 32.4, below economists’ forecasts and the lowest level since 1980, from 36.2 the prior month. Readings less than 50 signal contraction. The group’s new-orders measure reached the lowest level on record and prices slid the most since 1949.
“Every component suggests that the weakness is going to carry over into 2009,” Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina, said in a Bloomberg Television interview. “There’s just not a whole lot of new business coming in,” and companies will have a “painful adjustment” as consumers shun spending.
Today’s figures underscore that, with private demand collapsing, manufacturers’ best hope for new business this year may be President-elect Barack Obama’s plans for an unprecedented stimulus package. Obama has pledged an investment program in roads, schools and the U.S. energy network akin to the 1950s-era interstate highway construction boom.
This really is a “wow” headline. Even if you take a “glass-half-full” approach and consider only the “factory index number” that fell down that far last time back in 1980, it’s still a pretty big deal. After all, almost thirty years ago is far back enough that the economy was probably smaller in nominal dollar-value back then. So if we’re at that index-number now, some serious contraction is certainly taking place.
As for the stimulus package this article mentions, I think its effects will be disappointing at best. My thinking is that imperial economies such as the USA are like an apple growing on a tree. There’s the “growing” stage where it is green and small but there’s a lot of room for growth; there’s the “maturity” stage where it’s big, pretty, and red and at the height of its capacity; then there’s the “ripening” stage where it falls off the tree, stays edible for a brief period, then it starts decaying. I don’t think there’s any denying that we’re in that last stage, and as is usually the case with imperial economies, there have been a lot of policies and trends that have hastened the “decay” phase along. And once this stage is far along, anything done to bring back the effects of a prior phase will mostly come to naught.
@Loveandlight: your analysis is compelling. I truly feel sorry for Obama, as I believe he fancies himself (metaphorically, at least) as the reincarnation of FDR, and the current crisis a reincarnation of the Great Depression, wherein Obama can be the hero and savior to the people. But I don’t think it’s going to play out that way. For one thing, I think the country is divided like it never has been before (well, except for the Civil War); and another thing, I think Americans in general are less sane than they’ve ever been before — on a lot of levels. And of course there is the fact that the CIA and Homeland Security didn’t exist during FDR’s time.
So this is what the end of an empire looks like…
I truly feel sorry for Obama, as I believe he fancies himself (metaphorically, at least) as the reincarnation of FDR,
I agree. I would say that Obama is well-intentioned in at least some pretty significant ways, or at least that’s the largely subjective “vibe” I get from him. As you said, though, that doesn’t mean he can rescue a rotten system, and what he can do is limited by the elite interests to which he is necessarily beholden.
and another thing, I think Americans in general are less sane than they’ve ever been before — on a lot of levels.
No argument here. If you usually read all the comments here, you probably know that’s one tune I’ve been playing ad nauseum of late! 😀
“I would say that Obama is well-intentioned in at least some pretty significant ways, or at least that’s the largely subjective “vibe” I get from him.”
I agree. I think most Democrats are well-intentioned, and I’d give Obama even more credit on that score than Clinton. I’ve been honing a theological theory the last few years, that there are 2 fundamental forms of sin: one of aggression, one of self-indulgence. The first is committed by the violent and cruel, the second by the weak and, well, self-indulgent. The Republicans usually lean more toward the aggressive form of sin, while the Democrats lean more toward self-indulgence, i.e., weakness. This is born out both by the “good” things they tend to support (Republicans [purportedly] support “strength” and “independence”, while Democrats lay claim to “compassion” and “diplomacy” — i.e., NOT being violent and NOT being mean-spirited). But on the “sinful” side, the Republicans are cruel and compassionless, and the Democrats encourage sloth and inappropriate “reasonableness” — the latter exemplified by Neville Chamberlain and his dealings w/Hitler (and yes, of course, I know he was a Brit, and a conservative to boot, but his approach was the opposite of what we see in modern American “Conservatives”). To say that any one party is guilty of only one or the other is silly, of course, but I do think there’s something to the basic dichotomy. In all of us, for that matter. Some of us are bullies, and some of us are wimps. Or, some of us value strength first, some value kindness first. There’s a positive and negative to both approaches.
Anyway, since the Right is obviously in charge of world affairs, both here and globally, the Democrats, like the “weak sisters” that they are, can only play by the tune that the Right dictates. And so, as “well intentioned” as Obama might be, he is being swallowed up by “practical politics” — which translates into being “Republican-lite”. As Kevin has repeatedly and conclusively illustrated, there’s plenty of non-carbon energy to tap into. But will Obama REALLY tackle that issue — which would require him to REALLY call Big Oil out as the global crime syndicate that it is? I doubt it. He’s got his “legacy” and the “future of the Democratic” party to think of. What a joke! Oh, well, silly things happen when empires implode, I guess.