May 11, 2008
The Way It Was: Charles E. Drew
 One of the great names of medicine is that of Dr. Charles E. Drew, a black American physician born in Washington, D.C., in 1904. He overcame walls of racial prejudice to become a doctor, and while studying at Columbia University became involved with prominent researchers working on the problem of blood storage.
Up until then, the challenge was to keep blood refrigerated until it was needed. He focused his efforts on separating and storing blood components, particularly blood plasma, in order to extend its shelf life.
During the Battle of Britain, Dr. Drew created protocols and procedures for the collection, testing and shipping of blood to England where it was desperately needed. Almost 15,000 people donated more than 5,600 gallons of blood. This experience saved countless thousands of lives during World War II.
The U.S. military went to great pains to segregate the blood of whites from blacks in those days, for no sane reason. And though Dr. Drew was the driving force behind the plasma project, he was denied the leadership role in it because of his race.
Dr. Drew was tragically killed in an auto accident in North Carolina in 1950. There were rumors he was denied medical treatment because of his race, but another black doctor traveling with him reported they received the best care available.
I’m glad he did. The reality of discrimination against that great man is embarrassing enough.
Posted by Hank Cox at 10:10 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
May 4, 2008
The Way It Was: Michael Ruettgers
If there is one trend that stands out in case studies of successful CEOs, it is that most of them spend time in blind alleys before they get to the executive suite.
Michael Ruettgers is a typical example. An indifferent student at the University of California, he spent most of his time at the beach or playing bridge. Cal sent him packing.
He got the message. He finally got a college degree and went on to Harvard Business School.
Fast forward to the late ‘80s. Ruettgers is executive vice president of EMC, a computer storage company that was on the ropes. The company was trying to stay afloat after shipping faulty products to customers.
Ruettgers met the challenge head on. The company guaranteed replacements even if the product was working just fine. It was a near run thing. The company, which was doing $123 million in sales, went through all but about $3 million of its bank loans to stay in business.
Ruettgers earned a reputation as a tough, aggressive competitor. By the mid-1990s, EMC had knocked of IBM as the number one provider of high end storage.
He made bets on new markets and acquisitions throughout that time. Ignoring doubters, he pushed storage boxes into non-mainframe servers, connecting to different types of servers. Soon that market made up more than half of EMC sales. Today, EMC’s market capitalization is more than $30 billion.
Posted by Hank Cox at 10:16 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
April 23, 2008
Dark and Cold, the World Without Coal
We Americans are caught up in one of our periodic frenzies of enthusiasm, this one about global warming and most of the emphasis seems to be on phasing out coal-fired power plants. The only problem is that we get half of our electricity from coal and it would take a very long time to wean ourselves away from it. Wind power and alternative fuels offer promise for the future – the very distant future – but we depend on coal now and will for a long time. Today few coal-fired generating plants are being built and the supply is running low. Soon we will begin to see brownouts and then blackouts. When you flick the switch and the lights don’t come on, when you turn on the air conditioning and nothing happens, the price of this enthusiasm will become clear.
One of the more persuasive arguments against shutting down coal fired power plants is that the Chinese are opening two new ones every week and have already passed us in terms of carbon dioxide emissions. Today’s New York Times has a front page story that Europe also is revving up the coal power.
Enthusiasm and lofty environmental aspirations are just peachy but the question that remains is what good will it do us – and the global climate – if we sacrifice our economy while the rest of the world continues its merry way.
Posted by Hank Cox at 4:57 PM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
April 6, 2008
The Way It Was: J. Brandenberger, Cellophane
We live in a world of marvelous products that make our lives immeasurably easier and more enjoyable, and usually we don’t give them a second thought.
Take for example – cellophane – that wonderful clear, clinging plastic that is found in every kitchen, and lots of other places. It did not spring into being of its own accord, and it doesn’t grow on trees.
Actually, cellophane was invented about a century ago by a Swiss chemist and textile engineer named Jacques Edwin Brandenberger. He was seated at a restaurant in Paris in 1900 when he saw a patron spill a bottle of red wine on a pristine white tablecloth. He decided to develop a way to make such fabrics impervious to wine, and other stains.
He never did, but one of his failed experiments left him with a plastic coating that kept sloughing off the cloth in big sheets of thin, transparent film. Brandenberg decided this film had potential and spent almost 10 years designing a machine to make it. Voila! Cellophane.
In 1912 he formed a company, La Cellophane, combining the words “cello” from cellulose with "phane" from the French word diphane meaning transparent. In 1923, he cut a deal with Du Pont to make and distribute the new material throughout North and South America.
Posted by Hank Cox at 2:17 PM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
March 30, 2008
The Way It Was: George Hearst
George Hearst was 26 years old when he inherited his father’s debt-ridden farm in Missouri in 1846. But he noticed some people nearby were making money with a lead mine. Hearst could barely read, but he got some books on geology and became an expert.
When the California gold rush got underway, Hearst was ready. Perhaps because he knew what he was doing, he found gold – lots of it. By 1857, he had developed his first large scale mine, the LeCompton near Nevada City, California. He took profits from there to the Comstock Lode in the state of Nevada where miners were taking the gold from black ore and throwing the silver away. Hearst focused on the silver.
Hearst was also focused on efficiency and he turned the Comstock into a showpiece of cutting-edge mining technology. Later he went to San Francisco and made more money in real estate. He made even more money as a consultant to various mining interests. And then hit paydirt again at a mine in Utah.
Hearst got interested in politics, and eventually served as a Senator from California. He died in office leaving his widow and son filthy rich.
The TV show “Deadwood” on HBO portrayed Hearst as an evil robber baron who had people shot right and left. The real Hearst was tough, all right, but he was all business. When he had a problem, he called in lawyers, not gunfighters. The results were the same.
Posted by Hank Cox at 8:23 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
March 23, 2008
The Way it Was: John Wanamaker
Probably few people ever had more influence on the American marketplace than Philadelphia’s own John Wanamaker.
Born in 1838, Wanamaker pioneered the concept we know today as the department store. You may have thought they dated back to the Garden of Eden, but it all began in the 1870s. Along with his brother in law Nathan Brown, Wanamaker opened a multi-purpose clothing and specialties store – called Wanamaker’s -- in an abandoned railroad depot in Philly.
He went after an upscale market and promised all wool clothing and money back guarantees – radical concepts at the time. He printed the first ever copyright store advertisements. When people discovered that its promises were true, his reputation was made.
I know half my advertising money is wasted, Wanamaker said. Trouble is, I don’t know which half.
Wanamaker just kept innovating: the first in-store restaurant, the first electric lights in a store, the first elevator, the first White Sale. He worked constantly to keep quality high and prices low. People like that sort of thing.
In 1911, Wanamaker expanded the Philly store, featuring a 150 foot high Grand Court with the world’s second largest organ and a great eagle from the 1903 World’s Fair.
Wanamaker’s store became more than a store. It was a place where people went to see and be seen, rather like the malls of today.
And it all started with John Wanamaker
Posted by Hank Cox at 7:06 PM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
March 16, 2008
The Way it Was: Ransome Olds
There is a popular myth that Henry Ford invented the automobile assembly line. It was actually a fellow named Ransome Olds who was the first person to mass produce cars in the U.S.
Olds began making steam and gasoline engines with his father, Pliny Fisk Olds, in Lansing, Michigan, in 1885. Olds designed his first steam powered car in 1887, and 12 years later, armed with growing knowledge of gas powered engines, started the Olds Motor Works in Detroit.
Unfortunately, before production began, his factory burned down. Exactly one prototype – a single cylinder buggy – survived. But he set up another factory and soon the Oldsmobile Gas Buggy – that’s what it was called – was selling very well.
The name Oldsmobile was first used in 1900, though the cars were known simply as Olds. It was the nation’s leading manufacturer of cars from 1901 to 1904, when Ransome Olds left the company to start another car company making something called “Reo” cars, or R-E-O, derived from his initials. The Reos were similar to Oldsmobiles but for some reason never sold very well.
Despite the departure of Olds, or perhaps because of it, the Oldsmobile Company prospered, and in 1908 was purchased by William C. Durant. Along with Buick, it became the foundation of General Motors.
UPDATE (10:50 p.m.): Corrected the reference to William Durant. Will Durant was the historian.
Posted by Hank Cox at 12:44 PM
|
1 comment; click here to read it or submit your own!
» Send to a Friend
March 9, 2008
The Way it Was: Ida Rosenthal
Ida Kaganovich was 18 years old when she emigrated from Russia to the United states in 1904. She changed her name to Cohen, and later changed it again when she married William Rosenthal.
Ida didn’t like to work for other people, so she bought a Singer sewing machine on the installment plan, and hung out her shingle as a seamstress. She did well, and by 1921 she was running a dress shop in Manhattan, along with a friend named Enid Bisset.
The Jazz Age was in full bloom. Women had won the right to vote and were working outside the home in increasing numbers.
But the so-called “flapper look,” which was the rage at the time, had them all trying to appear flat-chested.
Ida hated that look. “Why fight nature?” she asked. So she and Enid came up with the first brassiere fitted with cups that separated the breasts.
The idea took off immediately. Within a year, the company registered the name Maiden Form and hired a salesman. Soon they quit making dresses and focused solely on brassieres. In 1928, they sold 500,000.
Ida was soon introducing new designs, managing the manufacturing process, negotiating with unions and coming up with racy ads. The company prospered and continued to prosper after her death in 1973.
This is truly one of the most uplifting stories in the history of U.S. manufacturing.
Posted by Hank Cox at 11:28 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
March 2, 2008
FISA: Surveillance Bill Moves in House?
Ed Morrissey outlines the developing arrangement that would allow House passage of FISA reform legislation, complete with telecom immunity. The report he cites: To break an impasse over legislation overhauling the Foreign Intelligence Surveillance Act, House Democratic leaders are considering the option of taking up a Senate-passed FISA bill in stages, congressional sources said today. Under the plan, the House would vote separately on the first title of the bill, which authorizes surveillance activities, and then on the bill’s second title, which grants retroactive legal immunity to telecommunications companies that aided the Bush administration’s warrantless electronic surveillance activities. The two would be recombined, assuming passage of both titles.
In this way, Democratic leaders believe they can give an out to lawmakers opposed to the retroactive immunity provision. Republican leadership sources said their caucus would back such a plan because not only would it give Democratic leaders the out they need, it would provide a political win for the GOP. It remains to be seen if such a move will placate liberal Democrats who adamantly oppose giving in to the Bush administration on the immunity issue. More on the legislative arrangement from the Los Angeles Times.
The Sunday Washington Post includes a big-picture review of the surveillance and telecom immunity disputes. (Motley Rice, bigtime trial lawyers known for asbestos and lead paint suits, are clearly motivated by heartfelt civil liberties concerns.)
Posted by Hank Cox at 12:21 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
The Way It Was: Henry Miller Shreve
One of the pivotal figures in developing the American economy was a guy named Henry Miller Shreve.
In the early 1800s, Shreve made a fortune running keelboats between Pittsburgh and New Orleans. There were no trains back then, and roads were primitive. You shipped your goods by water if you could, but it was a tough haul upriver with horses pulling the boats from the shore with ropes.
Shreve was the first to build a steamboat with a high pressure, non-condensing engine. It had 100 horsepower. He was the first man to drive a steamboat upriver from New Orleans to Pittsburgh. He made the trip in only 34 days which was a major breakthrough.
But Shreve’s real claim to fame was as inventor of the snag boat. Snags were trees that had fallen into the river creating obstacles to boats. The main tributaries – the Arkansas, Ohio, Missouri, and Mississippi Rivers – were obstructed by tens of thousands of them accounting for three fifths of boating accidents.
Shreve designed a steam powered monster boat with giant claws, cranes and a heavy battering ram on an ironclad beam. Huge trunks were hauled up on deck and put through a saw mill right then and there.
Perhaps Shreve’s biggest feat was clearing the Red River that was clogged for 160 miles, opening up for cultivation some of the richest farm land in the nation. They named Shreveport after him.
Posted by Hank Cox at 12:08 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
February 24, 2008
The Way It Was: George Bissell
There is something about the name Bissell that prevents people from getting credit for their contributions. There was a man named Israel Bissell who rode much farther than Paul Revere rode on that fateful night long ago, and warned more people about the British movement, but his name didn’t sound poetic.
Listen my children and you shall hear of the midnight ride of…Israel Bissell? Just didn’t work.
Not many years later there was another important man named George Bissell who founded the nation’s first petroleum company and financed the first substantial oil well.
Bissell actually started out life as a scholar. He came from humble beginnings but somehow worked his way through Dartmouth College, graduating in 1845. He went on to write for newspapers and later served as superintendent of public schools in New Orleans. He learned other languages and studied law and by 1853 was practicing law in New York City.
In those days, there was growing demand for lighting materials – mainly whale oil and candles. Bissell saw the potential in petroleum because it burned. He rounded up some investors and founded the Pennsylvania Rock Oil Company.
He hit on the idea of using derricks to drill for oil, as was then being done to extract salt. It was Bissell’s group that funded the famous Drake Well in Titusville, Pennsylvania, in 1859.
So make a note of it. The real pioneer in oil was not named Rockefeller, he was named Bissell, George Bissell.
Posted by Hank Cox at 7:40 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
February 17, 2008
The Way It Was: George Eastman
In 1877, a slim young bank clerk named George Eastman bought his first camera and set out to photograph a natural bridge. He took along a tripod, a darkroom tent and bottles of chemicals. In the darkness of the tent, he coated a glass plate with a thin solution of egg white, and then laid on an emulsion of gun cotton and alcohol mixed with bromide salts. When the emulsion was set but still moist, he dipped the plate in a solution of nitrate of silver and shielded it from light as he put it in the camera.
Whew! That was what you needed to do back then to take a photograph. Eastman thought, hmmm, there’s got to be a better way.
Eastman went to work. In 1888, he went to market with a handheld camera with a light-sensitive roll of treated paper inside. He called it Kodak because he liked the sound of the K. He sold 13,000 cameras for $25 each, a lot of money back then. You took 100 shots and sent the camera back to Eastman. He sent you your photos and another roll of film.
It was still too complicated. In 1900, he came out with the immortal Brownie that he sold for $1 each. Within a year, he sold 250,000. Eastman had made photography an everyday event for the average consumer.
Eastman kept inventing all his life and gave away $100 million for education and racial advancement.
Posted by Hank Cox at 10:00 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
February 10, 2008
The Way It Was: Mason and Dixon
Most of us have heard of the famous Mason Dixon Line that separates Pennsylvania from Maryland. It is generally regarded as the dividing line between north and south, though of course Maryland was actually a Union state in the Civil War.
But the Mason Dixon line preceded the Civil War by a century. In the 1760s, when we were still a British outpost, wealth landowners in Pennsylvania and Maryland commissioned a survey to settle a decades old dispute about boundary lines.
Charles Mason and Jeremiah Dixon were actually trained astronomers and mathematicians in Britain, well known for charting the transit of Venus when it passed near the Earth in 1761. Thomas Penn, the proprietor of Pennsylvania, and Cecilius Calvert, otherwise known as Lord Baltimore, came to England looking for someone to settle their border dispute. Mason and Dixon got the job.
It was no small undertaking. They headed into the American wilderness with 115 ax men and cooks dragging along tents and 500 pound stone markers. They hired dozens of Indian scouts to protect their flanks as they cut an eight-yard wide swath 230 miles into the wilderness.
Mason and Dixon were the first true geodetic surveyors, which means they took into account the shape of the Earth when making their boundary calculations. Given the technology they had to work with, their calculations were astoundingly accurate. At last report, Maryland was still a Union state.
Posted by Hank Cox at 7:51 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
January 27, 2008
The Way It Was: Min Kao
Perhaps the greatest asset of American industry is our openness to ambitious people from other countries.
An excellent case in point is a gentleman named Min Kao who grew up in a small town in Taiwan and moved to the U.S. in 1976. He brought a degree in electrical engineering with him and earned an M.S. and Ph. D. from the University of Tennessee.
By the 1980s, Kao and his friend Gary Burrell were working for Allied Signal. Kao had developed the first Global Positioning System for use in planes, and had ideas for other applications.
Kao and Burrell saw a huge opportunity to transfer GPS technology from aviation into the marine, automotive, outdoor and fitness markets. They left Allied Signal and managed to raise $4 million by hitting on friends and investment bankers, establishing Garmin Ltd. They hired a dozen engineers to design and build their first product – a GPS system for boaters. It cost $2,500 and was an instant hit. After its debut at a trade show, they had a 5,000 unit backlog of orders.
As Chairman and CEO, Kao has built an effective team at Garmin where everyone is encouraged to participate in making decisions. Today Garmin is the number one maker of navigation gear in the U.S. The company has 6,400 employees around the world and has shipped more than 22 million products.
Posted by Hank Cox at 8:18 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
January 25, 2008
From Dreams to Reality: Manufacturing IN Jobs
Amid the breast-beating and lamentations about manufacturing jobs moving overseas, it is easy to lose sight of the fact that we are still by far the world’s greatest manufacturing nation, that we produce more volume of manufactured goods than ever before (albeit with fewer workers) and that, irony of ironies, the biggest challenge facing many manufacturers is a shortage of qualified workers.
Modern manufacturing is high tech. Applicants need strong backgrounds in math, science and computers. The young people emerging from our high schools who are not college bound are woefully unqualified to work in modern manufacturing. The NAM’s Dream It! Do It! campaign was designed to attract a new generation of bright young people to manufacturing careers, and to inform them what skills they need when they get there.
That there is ample opportunity for careers in manufacturing there is no doubt. Consider the recent announcement of Cummins that the company is creating 500 new jobs in Columbus, Ohio. Average pay is $80K. Your average liberal arts grad will be lucky to land a job paying $30K. Not everyone needs or will benefit from a degree in Elizabethan poetry. Many of our bright young people would find fulfillment and prosperity working in modern high tech manufacturing. But the public schools are simply out of touch with the workplace. We have to work around them.
Other links: Dream It! Do It! Southeast Indiana
Indianapolis Star: "675 new jobs offset some recent losses"
WISH-TV: "Hundreds of new jobs headed to Bartholomew, Hancock Counties"
Posted by Hank Cox at 7:45 AM
|
1 comment; click here to read it or submit your own!
» Send to a Friend
January 20, 2008
The Way It Was: Levi Strauss
Let’s go back in time to California 150 years ago, the gold rush. Desperate men are hacking away at the earth. It’s hard work, sunup to sundown, with shovels and picks. Wool and cotton clothing don’t hold up very well. Everyone is walking around in rags.
Back in New York Levi Strauss loads up stuff he figures miners need, and sets out for San Francisco. In 1853, the city was a riot. There were 399 saloons, 28 breweries, hundreds of brothels and 1,200 reported murders in a population of 70,000, and another 2,400 newcomers disappeared, never to be seen again.
A tough town demands tough pants. Levi was selling rough canvas for tents and wagons. A miner said what he really needed was pants that would last. Strauss obligingly made some canvas into overalls.
Miners liked the new pants, but they chafed. So Strauss substituted another material that became known as denim.
A tailor from Nevada came up with the idea of rivets at key points to keep the pants intact. Voila, blue jeans were born.
Levi achieved immortality with blue jeans, though jeans is a word he never used. Long after his death, the company began using the term. Today blue jeans are everywhere.
Oddly, this product that was created in response to necessity didn’t fully come into its own until it became a fashion statement. It is the consumers’ preferences that drives the market, not their needs.
Posted by Hank Cox at 7:48 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
January 10, 2008
A Balance of Financial Terror
A fascinating article in the latest issue of The Atlantic (Jan/Feb 2008) about China by the inimitable James Fallows sheds abundant light on our mutually dependent relationship with that country, "The $1.4 Trillion Question." We buy their under-priced manufacture goods by the boatload enabling them to shift seas of people from farms to cities. They flood our country with low cost goods and, more importantly, accumulate a $1 billion a day worth of our bonds and currency, enabling us to live beyond our means year after year without explosive inflation.
But of course this devil’s bargain exacts a price. Millions of U.S. manufacturing jobs are lost; U.S. politicians come to believe endless deficit spending is acceptable; China accumulates enough U.S. money and bonds to disrupt world markets; and the Chinese do not get to use the wealth they have earned – either through decent living standards, medical care, or basic environmental protection.
The big question looms – what happens if a political crisis should rupture this cozy arrangement. Without access to the U.S. market, China’s factories would sputter to a halt. Without China’s $1 billion daily loan, the U.S. could not keep its economy stable or forestall the dollar’s collapse (which would also wipe out a major part of the value of Chinese foreign currency reserves).
Fallows says Lawrence Summers, former U.S. Treasury Secretary and President of Harvard, compared this to our cold war standoff with the Soviet Union in which each side could not dare launch a nuclear attack on the other for fear of retaliation. Summers calls it “the balance of financial terror.”
Sleep better everyone.
[Fallows also blogs about the issue here, implying it might be a worthy topic for discussion by the presidential candidates.]
Posted by Hank Cox at 9:46 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
November 13, 2007
Natural Gas, Natural Prices
Manufacturers are heavily dependent on natural gas in part because Congress, in its infinite wisdom, has encouraged them to rely on gas instead of other fossil fuels. Natural gas is more environmentally friendly than coal or oil (but not nuclear, of course. Nothing is more environmentally friendly than nuclear power.)
Unfortunately, natural gas does not have a world price like oil. We only have six teriminals for offloading Liquefied Natural Gas in this country, the same number as South Korea. So natural gas is priced according to local supply and demand. In the wake of Hurricane Katrina in August 2005, natural gas prices shot up and manufacturers took a big hit.
But now oil prices are going through the roof while the price of natural gas remains stable. (As reported by Floyd Norris in the New York Times.) Oil has been pushing historic highs, knocking on $100 a barrel. Natural gas is actually selling for a little less than it did at the end of last year. This is good news for manufacturers and consumers who use natural gas. They might have a little extra in their stockings come December 25.
Posted by Hank Cox at 2:03 PM
|
1 comment; click here to read it or submit your own!
» Send to a Friend
Everytime It Rains, It Pours
It is a given that manufacturers appreciate the value of raw materials. It is their business to transform raw materials into finished products which they sell to consumers. Survival requires them to make certain the cost of the raw materials – along with labor and everything else -- is reflected in the price of the products they make.
But the government lives in a different world where normal economic pressures do not apply. Consider the humble penny. (As did Post columnist Cindy Skrzycki today.) Pennies are made up mostly of zinc with a copper-plated surface. It costs the government 1.67 cents to make one. Let’s say that again. It costs the government almost two cents to make one cent. The U.S. mint lost $31 million making 6.6 billion cents in fiscal 2007.
Does this make, ahem, sense?
And while we’re on the subject, it costs Uncle Sam a dime to make a nickel.
There is a bill in the House, H.R. 3956, that would give the Secretary of the Treasury authority to stop this foolishness.
And while we’re at it, we could save more than $500 million a year by eliminating the paper dollar in favor of the beautiful new gold-colored dollar coins. Just think of all the new bridges to nowhere we could build with that much saving.
Posted by Hank Cox at 1:47 PM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
November 5, 2007
Increasing Exports and Economic Growth
In the current issue of Industry Week, Tom Duesterberg of the Manufacturers Alliance/MAPI makes a compelling case for the importance of international commerce to our country. “Global trade is booming,” he writes. “Total world exports are up 138 percent since 2001. Economies in places like China, India, East Asia, Mexico, Brazil, East Europe and Russia are growing rapidly. The United States is especially strong in capital goods and has strong market share in this fast-growing niche. U.S. manufacturers export more than 20% of all they produce, and total goods exports are growing by around 11% this year due to the global economic boom and a weaker U.S. dollar.
“U.S. manufacturers control over 40% of global production for high-tech products, while U.S. agricultural exports represent only 8% of global exports, reflecting the much smaller size of global markets.”
Duesterberg uses this data to make his case that we should not let concern about the agricultural sector derail Doha negotiations. “It makes little economic sense to let the agricultural tail wag the dog on trade policy,” he argues. Amen.
Posted by Hank Cox at 12:36 PM
|
1 comment; click here to read it or submit your own!
» Send to a Friend
October 24, 2007
Report from America: Little Rock, Arkansas
 I was pleased for the opportunity to address the combined 79th Annual Meeting of the Arkansas State Chamber of Commerce and the Associated Industries of Arkansas in Little Rock yesterday. It looked like about 200 people, maybe more, turned out to hear U.S. Chamber of Commerce President Tom Donohue and yours truly of the National Association of Manufacturers.
Tom was his usual feisty self throwing rhetorical rocks at labor unions and left-wing activist groups that are advocating higher taxes and bigger government. I focused mainly on the story of manufacturing – that the U.S. remains the world’s greatest manufacturing nation, that manufactured exports are vital to our economy, and that it is high time our political leaders made competitiveness a priority. Tom and I were singing the same tune in our advocacy of a sensible energy policy, reducing corporate taxes, upgrading our infrastructure, reforming health care, bringing sensible balance to our legal system and promoting international trade.
It was my first visit to Little Rock. I was duly impressed with the beautiful city and wonderful people I met there. I extend sincere thanks to Hugh McDonald, Chairman of the Arkansas State Chamber, Benny Baker, Chairman of the Associated Industries of Arkansas and all of the others who made my visit such a pleasure. I hope to see you again.
Posted by Hank Cox at 9:42 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
Robert Samuelson: Globalization's Real Story
Saying Bob Samuelson got it right again is like saying the New England Patriots scored another touchdown – you can only yawn and ask, “What else is new?”
In today’s column, "A Villain to our Rescue," Samuelson lays out the story of world trade and its impact on the U.S. economy. Yes, we have a huge trade deficit but it is coming down. At a critical time, when the housing meltdown threatens to send our economy into a tailspin and the U.S. consumption machine is faltering, exports are picking up the slack and keeping the economy growing. This is the way free trade is supposed to work and its benefits are abundantly clear.
But as Bob notes in his close: All the ritualistic denunciations of globalization are not harmless. Psychology matters. If global investors fear that the United States might make its economy less open to foreign trade and investment, the result may be the dollar panic that everyone fears. The dollar’s status as the world’s central international currency depends on its usefulness in buying and selling. The more we restrict, the less useful it becomes. Globalization’s casual bashers should remember that. They think they’re playing only to a domestic audience, but the world is listening, and it may not like what it hears.
Posted by Hank Cox at 9:29 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
October 5, 2007
Ban Asbestos in America Act: Déjà Vu II
When I read of the Ban Asbestos in America Act of 2007, passed by the Senate yesterday, it was for me, in Yogi Berra’s famous phrase, déjà vu all over again. The bill charges the National Institute for Occupational Safety and Health (NIOSH) to study asbestos and the Environmental Protection Agency (EPA) to prohibit the use and sale of products that contain asbestos.
Good grief. NIOSH and EPA and also OSHA and the CPSC have been all over the asbestos case for 35 years beginning with hearings at the Labor Department in 1972. Here are the facts. Asbestos is a useful mineral common throughout the world. Everyone has been exposed to it. There are different kinds of asbestos. The most common type, chrysotile, does not appear to be particularly hazardous to people. The majority of asbestos-related illnesses stems from excessive exposures that occurred during ship construction in World War II. After many years of intensive study, the EPA concluded that intact asbestos in buildings should be left alone.
Asbestos has marvelous fire-retardant properties that save lives. The politically driven mania to ban asbestos creates serious hazards where none need exist. The crash of the shuttle Challenger, for example, was caused by the failure of critical O-rings which, because of a CPSC ban on asbestos products, were not sealed with the standard putty containing asbestos. Many useful products are safe for humans because they contain asbestos.
This bill, if it becomes law, will create hazards where none exist.
Posted by Hank Cox at 11:32 AM
|
3 comments; click here to read them or submit your own!
» Send to a Friend
September 25, 2007
Grasping Unemployment from the Jaws of Work
In his master work “From The Jaws of Victory,” historian Charles Fair recorded how King Philip II of Spain, who sent the Armada against England, prevailed upon the Pope to create a roaming inquisition of the fleets and galleys. “To have been a galley slave accused of heresy by roaming inquisitors,” Fair dryly observed, “must have come close to exhausting the possibilities of human misfortune.”
I had that very thought when I read this morning that 73,000 employees of General Motors had walked off the job. What else can go wrong for GM? News reports indicate that the United Auto Workers understand they must make concessions to enable GM to remain competitive, but in return they want “significant promises of job security.”
Note to UAW members: If you want job security, go into government service. GM is in trouble today because previous managements made promises that simply were not sustainable in the long term. The current management is determined to avoid that mistake. To survive and prosper, GM must remain flexible. It’s a tough world out there for manufacturing, tougher than it’s ever been before. The UAW rank and file need to accept that reality, suck it up and get back to work.
Posted by Hank Cox at 10:04 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
Dequity
Winston Churchill famously said that democracy is a terrible system of government, except for all the others. One could say the same thing about capitalism: It’s abundantly superior to other economic systems, but it’s prone to excesses. We saw it in the dot com bubble of a few years back, and now we’re seeing it in the housing bubble. It’s not that sensible people don’t see these things coming, but no one seems to know how to stop them.
In his commentary today, Bloomberg’s John Berry – reviewing Alan Greenspan’s book – says the former Fed chairman deemed it impossible to know when a rise in asset prices, be it for stocks or housing, becomes a bubble, and added that in any case the Fed cannot deflate a bubble without throwing the economy for a loop.
The housing bubble was great while it lasted. Soaring house prices made many of us equity rich. At our house, we refinanced to send our children to college and pay off cars. We were lucky; we have less equity today than a year ago, but we still owe less on our house than it is worth.
Many people aren’t so fortunate. They bought at the top of the market and now find they have shifted from equity to dequity. As a growing number of adjustable rate mortgages begin to kick in, there will be more foreclosures and personal bankruptcies. We have not yet seen the end of the housing slump. The question is – can manufacturing and exports pick up the slack and keep the economy growing?
Posted by Hank Cox at 9:49 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
August 30, 2007
Ecuador, China and the Dollar
The dollar is losing ground against most foreign currencies and the result is a steady uptick in U.S. exports, driven mainly by manufactured goods, and more exports translates into more good paying manufacturing jobs in the U.S. There are other factors at play, of course, but the value of a nation’s currency is a key determinant of its export performance.
The impact is being felt in other countries, such as Ecuador which adopted the U.S. dollar as its currency back in 2000. As the dollar declines against other Latin American currencies, Ecuador is becoming an increasingly popular shopping Mecca. For example, four years ago, a dollar bought 2,909 Columbian pesos. Today it goes for only 2,185 pesos. Ecuadorean border towns are doing a roaring business with Columbian shoppers searching for bargains.
Of course, the declining dollar is not reducing our trade deficit with China because the Chinese continue to intervene in currency markets, buying U.S. currency and bonds to keep the value of their own currency artificially depressed. Washington is growing impatient with China’s currency manipulation. Watch for legislation to start moving when legislators return from the August recess.
Posted by Hank Cox at 9:40 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
August 14, 2007
Victory! And Manufacturers Helped Make It Happen
Today is the 52nd anniversary of the surrender of Japan in World War II, bringing to an end the most destructive of all the 20th century’s conflicts. In recent years, there has been a spate of books and movies celebrating what Tom Brokaw dubbed “The Greatest Generation” of Americans who survived the Great Depression and went on to win that terrible war.
But while we tend to think of their contributions mainly in terms of battlefield victories, it is fair to say the war was actually won on the home front where the American economy achieved prodigies in production of war material. By the time the war came to an end on this date, U.S. manufacturing had churned out 296,429 airplanes, 102,351 tanks and self-propelled guns, 372,431 artillery pieces, 47 million tons of artillery ammunition, 87,620 warships, and 44 billion rounds of small arms ammunition.* Even the Soviet leader Joseph Stalin, no great admirer of capitalism, recognized the importance of this feat at the Teheran Conference in late 1943, where he proposed a toast “to American production, without which the war would have been lost.”
* Cited in "A Military Miscellany," by Thomas Ayres.
Posted by Hank Cox at 7:54 AM
|
2 comments; click here to read them or submit your own!
» Send to a Friend
August 6, 2007
Rangel in Peru: Reasons for Hope on Trade?
House Ways and Means Committee Chairman Charlie Rangel (D-NY) was in Peru yesterday with Trade Subcommittee Chairman Sander Levin (D-MI). (Reuters story.) Rangel’s committee will debate a Free Trade Agreement (FTA) with Peru in September. The Peru agreement is the first to include provisions that each country observe basic labor rights which was inserted at the insistence of the House leadership in a political playoff to organized labor. (USTR summary sheet here.)
Even if Rangel and Levin conclude Peru will live up to its commitments, many members of Congress remain opposed to free trade. Approval of new FTAs and renewal of Permanent Trade Negotiating Authority are in peril. This is not good. Our economy is irrevocably intertwined with the world economy. The last time the Unites States turned inward, with the Smoot-Hawley tariffs of 1930, it worsened and prolonged the Great Depression. After World War II, we championed open markets and free trade. Our economy has benefited enormously.
To be sure, unfair trade practices must be dealt with. But that doesn’t mean backing away from opening foreign markets for U.S. goods. We need to keep in mind that the U.S. exports about $70 billion a month in manufactured goods, which supports a lot of jobs in the U.S., and exports are growing faster than imports. Only a miniscule share of our overall trade deficit – about 6 percent – is with countries where we enjoy free trade agreements. Where U.S. exporters can compete on a level playing field, they more than hold their own.
“We have expressed our concerns, but we leave convinced that both the United States Congress and Peruvian Congress enthusiastically support this agreement,” Rangel said. Let us hope he is right and that Congress will summon the will to support free trade despite the blandishments of the unions.
Posted by Hank Cox at 4:47 PM
|
1 comment; click here to read it or submit your own!
» Send to a Friend
Hunting Hard for Manufacturing Workers
There is much weeping, wailing and gnashing of teeth about the exodus of manufacturing jobs to other countries, but the reality is that U.S. manufacturers all over the country are desperately looking for qualified workers – and can’t find them. The New York Times on Sunday (story here) offered an excellent example from the Bronx where Felix Storch, Inc., a company that customizes refrigerators, is being forced to outsource to factories in Connecticut and Mexico. The company is growing. It hit $30 million in sales last year and needs qualified employees but they aren’t there. “We have been desperate for skilled help,” said company spokesman Paul Storch. “Some Bronx high school graduates can’t do simple math and have trouble using a tape measure to find the midpoint. If they don’t have the skills to drill, and make a mistake, we have to throw away a $500 refrigerator.”
Storch does not want to outsource work. “We prefer to do it here because we can offer two-day delivery versus two weeks,” he said. “If I outsource, you may not buy from me.”
Storch is investing $374,100 of his company’s money in an on-site training program for area workers, and the New York City Department of Small Business Services is chipping in $243,900. But we are left to wonder about public schools producing high school graduates who cannot perform simple math. Our public schools are failing big time. It’s a national disgrace.
Posted by Hank Cox at 1:09 PM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
August 1, 2007
Of Truth, Trust Funds and Think Tanks
The Trobriand Islanders of the South Pacific (also known as the Kiriwina Islands, an archipelago of coral atolls off the eastern coast of New Guinea) have a marvelous word with no counterpart in English – mokita. It means the truth that everybody knows but nobody speaks.
Columnist Bob Samuelson today makes another one of his periodic attempts to call attention to our biggest mokita – the pending crisis of entitlement programs (link). “Consider the outlook,” Bob writes. “From 2005 to 2030, the 65 and over population will nearly double, to 71 million; its share of the population will rise to 20 percent from 12 percent. Social Security, Medicare and Medicaid – programs that serve older people – already exceed 40 percent of the $2.7 trillion federal budget. By 2030, their share could hit 75 percent of the present budget” taking away funds for other programs, such as national defense and medical research.
This crisis looms a lot bigger and sooner than global warming, but there is zero willingness in Washington to grapple with it, not even among the vaunted think tanks that are often eager to embrace controversial issues. Bob theorizes that the think tanks on the left don’t want to get into it because they know the solution will involve reductions of retiree benefits, and the think tanks on the right shy away because they know an expansion of government is inevitable. He challenges the six leading Washington think tanks, three on the left and three on the right, to get off the sidelines and show some intellectual courage by collaborating on a book that recognizes the pending crisis and proffers solutions, which of necessity will be unpalatable.
I could offer a little subchapter of my own about the mythical Social Security Trust Fund which is supposed to keep the system solvent until 2042. The trust fund consists of a few pieces of paper – non-negotiable bonds -- that say in effect that our government owes itself a lot of money. It is a liability, not an asset. When Social Security begins to pay out more than it takes in, about eight years from now, Congress will have to make up the difference with real money from current revenues.
So will the think tanks accept Bob’s challenge and out the mokita? Don’t hold your breath.
Posted by Hank Cox at 9:48 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
July 25, 2007
Chartreuse Journalism on Energy, Coal
The growing chorus of media hype about global warming reminds me of George Orwell’s “Ministry of Truth,” but to Jack Shafer, who writes the Press Box column for slate.com, it’s “green journalism” which is just the latest manifestation of “yellow journalism.” (link)
“Often as sensationalistic as its predecessor, green journalism tends to appeal to our emotions, exploit our fears, and pander to our vanity,” he wrote earlier this month. “It places a political agenda in front of the quest for journalistic truth and in its most demagogic forms tolerates no criticism, branding all who question it as enemies of the people.”
When public policy is driven by propaganda and emotion, the results can be catastrophic. Right now eager environmentalists in Congress are championing draconian Corporate Average Fuel Economic (CAFE) standards that are simply not feasible and would have a devastating impact on the U.S. auto industry – destroying thousands of jobs. And today’s Wall Street Journal (subscription link) offers a front page account of plans for new coal-fired electric power plants being abandoned wholesale for fear of environmental consequences. We need more electric power now, and windmills won’t cut it, but reason must yield to the “green journalism” propaganda machine.
While we sabotage our own economy, the Chinese continue to build thousands of coal-fired power plants that will more than offset whatever meager gains we achieve in reducing greenhouse gases. Does this really make sense to anyone?
Posted by Hank Cox at 1:26 PM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
July 18, 2007
Almost Heaven, Robert C. Byrd Institute
Walk around the campus of Marshall University in Huntington, West Virginia, and you will encounter an ultra-modern library complete with the latest on-line digital technologies empowering students by putting a whole world of knowledge at their fingertips. It cost millions of dollars courtesy of Senator Robert C. Byrd (D-WV), who knows a thing or two about channeling federal money to the home folks. “I know some of you up there in Washington call this pork,” said the Marshall official who showed me around, “but to us, it’s a really great library.”
Keep walking around the Marshall campus and you will encounter another “pork” project – the Robert C. Byrd Institute for Advanced Flexible Manufacturing. Founded in 1990, the RCBI introduces new concepts to manufacturers in “teaching factories” where manufacturing companies and their workers can obtain hands-on experience and training with computer-controlled mills, lathes and other state-of-the-art technologies.
A recent study found that the RCBI was directly responsible for bringing more than 1,000 highly skilled and higher paying jobs to the region and adding $290 million in output to state companies using its services. (A .pdf summary of study is available here.)
The Mountain State is chock full of Senator Byrd’s largess, and certainly not every project is viable. But some of them – like the two mentioned here – are sound investments in the future.
Posted by Hank Cox at 10:15 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
June 30, 2007
For all the Coal in China
There is a growing crescendo of support in the United States for dramatic action to curb greenhouse gas emissions linked to global warming, but it is becoming increasingly clear that the real challenge lies elsewhere. According to a recent report issued by the Netherlands Environmental Assessment Agency, U.S. carbon dioxide emissions from fossil fuels declined 1.3 percent in 2006 while our economy was growing 3.3 percent. Energy use per unit of GDP fell 4.2 percent last year and carbon dioxide emissions per unit of GDP fell 4.5 percent. We are already doing more than our part.
Meanwhile, on the other side of the globe, China has become the world’s number one polluter. China relies on coal for 75 percent of its energy and industrial energy needs. China already has 16 of world’s 20 most polluted cities. A third of California’s air pollution and a fifth of Oregon’s comes from China, and the Chinese are planning to build 2,200 more coal-fired energy plants by 2020. (More from the National Center for Policy Analysis here.)
And of course the Chinese would like nothing better than for Congress to impose more environmental restrictions on U.S. industry, transferring even more U.S. jobs to their country.
Posted by Hank Cox at 4:35 PM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
June 25, 2007
Heat Mongering! Now That's a Term...
The global warming mania has transcended the realm of sensible policy debate into a frenzy of scaremongering and orchestrated mass hysteria. Anyone who dares to even question the prevailing wisdom so dramatically portrayed in Al Gore’s film, “An Inconvenient Truth,” is dismissed as an ideological crank or stooge for the energy companies. A global Live Earth concert scheduled for July 7 is expected to raise huge sums of money to fund even more scaremongering.
There is a scientific consensus that the earth is heating up, and it is plausible that human activities, emission of greenhouse gases, are a contributing factor. But it is also true that the earth was heating up and cooling down billions of years before humans appeared on the scene. World weather patterns are poorly understood and may very well have as much to do with sunspots as with human activities.
Emily Yoffe, a contributing writer to Slate.com, has a delightfully contrary op-ed in today’s Washington Post making many of these points. “Thanks to all the heat mongering,” she writes, “it’s supposed to be a sign of denial because I refuse to trust a weather prediction for 2080 when no one can offer me one for August 2008 (or August 2007 for that matter).”
Thank you Emily Yoffe for tossing a note of sanity into the cacophony.
Posted by Hank Cox at 1:58 PM
|
1 comment; click here to read it or submit your own!
» Send to a Friend
June 18, 2007
Lou Dobbs and Bobby Hill: Separated at Birth?
 Sometimes humor is the most effective weapon against demagoguery and nobody is better at it than Gene Weingarten, who writes a weekly humor column for The Washington Post Magazine. For his June 17 column, Weingarten chose a most appropriate target – Lou Dobbs.
Weingarten acknowledges that once upon a time, Dobbs was "an actual newsman," but then he realized he could get a lot more attention by ranting and raving. "Like a pigeon in a box who gets rewarded with a corn kernel every time he flaps a designated wing, Lou was soon just one big madly flapping right wing."
Weingarten has a lot of fun with Lou’s penchant for nonsense and rigged polls, but my description of the column doesn’t do it justice. Go take a look for yourself.
Posted by Hank Cox at 10:26 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
June 11, 2007
The Assault on Accurate Historical Quotes
In his new book, "The Assault On Reason," Al Gore quotes Abraham Lincoln thusly: I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. There has long been a cottage industry in concocting phony quotes and attributing them to Honest Abe. We can thank Andrew Ferguson in The Washington Post (here) for pulling the rug out from under this one. Lincoln's own son Robert Todd Lincoln repudiated it. Somehow it is not surprising that Al Gore was taken in by it. He gets taken in by so many things.
Posted by Hank Cox at 9:15 AM
|
1 comment; click here to read it or submit your own!
» Send to a Friend
May 30, 2007
Lou Dobbs Caught in the Act of Deceit
There is a wonderful and long overdue expose of Lou Dobbs in today’s New York Times by David Leonhardt. It begins with Lou’s preposterous claim, that he defended in an interview with Leslie Stahl on the CBS program “Sixty Minutes,” that there had been 7,000 cases of leprosy reported in the U.S. in the last three years. When Stahl challenged him, Lou said, “If we reported it, it’s a fact.” In reality, there have been 7,000 cases of leprosy reported in the last 30 years, not three. Leonhardt also cited Dobbs’ claim that a third of the inmates in the federal prison system are illegal immigrants. Actually, illegal immigrants comprise 6 percent of the federal prison population.
But then, it would take a lot of space to document all of the bogus claims aired by Lou Dobbs. Or as Leonhardt put it, “Mr. Dobbs has a somewhat flexible relationship with reality.” Man does he ever.
Posted by Hank Cox at 1:57 PM
|
3 comments; click here to read them or submit your own!
» Send to a Friend
May 29, 2007
Still No. 1!
In 1947, India achieved independence after about two centuries of British rule. In 1952, a polling firm undertook to find out how many Indians were aware the British had left. India was a primitive country back then. Most people were illiterate and few had access to radio or newspapers. Even so, the pollsters were amazed to discover that the great majority of India’s people were not only unaware the British had left, they were unaware the British had ever arrived in the first place.
A recent report in the Financial Times that China will gradually take over the role of the U.S. as the world's largest manufacturer by 2020 will no doubt elicit the same kind of response. It is fair to assume that after years of incessant news reports of China’s great leap forward in manufacturing, many Americans thought the Chinese had long since overtaken us in manufacturing and will be surprised to learn otherwise.
In truth, the U.S.'s position in the global league table of manufacturers remains surprisingly strong, according to an authoritative economic study by Global Insight, a Washington-based economics consultancy. Global Insight forecasts that the U.S. will keep its share of global manufacturing output above 20 percent at least until 2024. The U.S. share of global manufacturing output is expected to fall to 22.2 percent by 2020 from 25.5 percent last year. By 2020, China's share would overtake that of the U.S. for the first time. It will rise to 22.4 percent, from 12.1 percent in 2006.
For now and for the foreseeable future, U.S. manufacturing remains the heart of our nation’s economy, producing more volume of manufactured goods than ever before. Standing alone, U.S. manufacturing would be the eighth largest economy in the world. We sell about $900 billion worth of manufactured goods overseas each year – which is a major reason we need to keep the trade lanes open – and we are more than a match for China, thank you very much.
Or to paraphrase Mark Twain, reports of the death of U.S. manufacturing have been greatly exaggerated.
Posted by Hank Cox at 11:20 AM
|
Let us know your thoughts: submit a comment today!
» Send to a Friend
| 
Add to Del.icio.us
Add to Newsburst
