Walking the Walk

Ever think that getting anything done in this country is just too complicated… too many rules… too many regulations? But when you take all those rules and regulations away, the “loophole masters” find a way to milk their cow, try and keep all the milk and leave nothing for the rest? Look at what’s going on at the high-performing, high-flying financial institutions in this melted economy. We saved their posteriors. We raged against that American wealth was predicated on “financial” games – selling new “bundles of risk” – buying with lots of debt, putting that debt on what you are buying versus your own balance sheet. What Americans were losing fast is making “stuff” with tangible values.

But what are those self-same financial high-flyers doing now? Supporting investments in American invention, creativity and manufacturing? NOT AT ALL. Making fortunes and paying fat bonuses simply by living in a world of financial instruments and market trading. Same-old, same-old. In fact, when you look at the landscape where small and medium-sized businesses can’t even borrow their basic operating capital to keep going, our manufacturing, creating and inventing capacity has been severely diminished. We’ve laid off engineers, tool and die makers, construction workers, architects, designers and we’re slashing our education budgets from top to bottom to make ends meet. Our biggest manufacturing sector – automotive – is a pale shadow of its former self.

Financial players and multinationals can move money anywhere in the world that they can make a buck. If you can’t make money in the U.S., move resources to “where the money grows.” It’s reminiscent of that magical question – “Willie, why do you rob banks?” – and Depression-era bank robber Willie Sutton’s purported answer (he denied he ever said this): “Because that’s where the money is.” Is America slowly sliding itself into a severely polarized society, with those on top searching for the gravy train with the investment capital to quench their thirst, and the rest of the nation in search of economic sustenance in a world where American workers lack the training and education to compete in a global market… ironically a global market heavily supported by U.S. investment capital?

One market sector is particularly illustrative of our quandary. We’ve proselytized “alternative energy” as our future path. We invented the silicon photoelectric power-generating chips and the panels that produce cheap and efficient electricity. Our government has prioritized this new “green manufacturing” sector as the path to new jobs in a new and glorious future. Subsidies abound. Yet, despite our engineering glory, we are falling behind China in actually manufacturing efficient hardware to implement our vision of ubiquitous solar-generated electricity.

The August 25^th New York Times: “The Obama administration is determined to help the American industry. The energy and Treasury departments announced this month that they would give $2.3 billion in tax credits to clean energy equipment manufacturers. But even in the solar industry, many worry that Western companies may have fragile prospects when competing with Chinese companies that have cheap loans, electricity and labor, paying recent college graduates in engineering $7,000 a year…. Since March, Chinese governments at the national, provincial and even local level have been competing with one another to offer solar companies ever more generous subsidies, including free land, and cash for research and development. State-owned banks are flooding the industry with loans at considerably lower interest rates than available in Europe or the United States.” With both China and the U.S. members of the World Trade Organization (China has not accepted WTO provisions regarding governmental procurement, however), don’t expect to see protectionist barriers rise to protect our industry anytime soon, although anti-dumping laws (selling below cost to the detriment of U.S. competitors) may be invoked if proof can be established.

Solar energy is still more expensive than electricity produced from coal, completely due to the cost of the panels, inverters and batteries necessary to make the systems work. It won’t be like that forever, and environmental concerns should force an even greater emphasis on this form of power generation. The subsidies are necessary. But with U.S. money tight, markets in disarray, and financial institutions unwilling to fund in accordance with governmental priorities because there is easier money to be made by playing purely financial games, it’s easy to see why China’s centrally controlled economy that has pushed past the recession into 7.9% annualized growth is accelerating its manufacturing processes before we seem to be able to start. Red alert; this is not a drill!

I’m Peter Dekom, and I am deeply concerned.