Some of the speakers, including Jack Ablin, Chief Investment Officer of Harris Private Bank and Dr. Bob Froehlich, Chairman, Investment Strategy Committee of Deutsche Asset Management, had some concrete explanations of missing the impact of the sub-prime financial crisis and seeing foreign investments for the future.   Dr. Froehlich pointed out that the area to make money would be to “go global”.

Even though this is an election year, he predicted the United States economy would be pretty flat again this year with one to maybe 2% growth, while the big growth would be found in other countries like China, Korea and others.

As for the presidential election, Dr. Froehlich said that the divisiveness of this election could create an outflow of foreign investments from the United States. 

ARE WE GIVING AWAY OUR LEADING-EDGE POSITION?

Over two decades ago, I made a very powerful statement that still resonates today:

“Leading-edge organizations do not maintain their position using trailing-edge technology.”

Substitute “municipalities” or even “countries” for the word “organizations”.   Without leading-edge skills and technology, there is no way we can sustain the lead in the global economy.

People are losing good jobs in America.  That’s a fact.  Good jobs that require degrees and technical background are being lost to other countries’ cheaper labor.  These are not jobs that “no one wants to work on.”  These jobs were good-paying careers.

The question becomes, where are these jobs going?  Why are we, the United States, giving away knowledge and technology that would keep many people gainfully employed?

There is also evidence that some universities are shifting their focus on preparing foreign students instead of American students.  What does this do for our global leadership position as well as our national security?  Watch this video http://www.youtube.com/watch?v=AS-_i0e0Mlw&feature=related 

Foreign investments are good and I am not an isolationist, but I think some institutions are doing irreparable damage to the U.S. economy in the name of foreign investment expansion.

There are a lot of concerns about China and what their real long-term strategies are.  We do not understand their whole culture as much as you may think we do.   In a government security meeting back in 2001

http://www.uscc.gov/hearings/2001_02hearings/transcripts/01_08_03tran.pdf, Dr. Michael Pillsbury of the National Defense University addressed the US China Security Review Commission and pointed out:

we have very few people who can read Chinese who work on Chinese security matters, close to none who can actually read a newspaper or an article published by the Chinese military or a Chinese government think tank, actually pick it up and right in front of you read it. We have almost no one in our government. We have almost no one in the university sector who can do that.

In another part of his speech (See pages 55-56 of 115), Dr. Michael Pillsbury comments:

Probably China’s biggest nightmare—China has many night-mares about the United States policy in the future. I mentioned overthrow of the government through peaceful evolution is one. Beefing up the Japanese is another. Pushing Taiwan toward independence is a third. But if you use Chinese communist doctrine to analyze the biggest nightmare of them all, in some sense, it would be that Steve Bryen would do to China what he did to the Soviet Union, and let me explain in one sentence why that is, and it’s in the first chapter of the book here.

Deng Xiaoping claimed that he made a creative contribution, something new, to Marxist-Leninist theory. Now, this is almost unthinkable. It’s like someone today saying, I’m adding something new to the message of Jesus Christ, and by the way, here it is. It’s quite a claim. And very few people appreciate what that claim is. It’s the heart of Deng Xiaoping theory.

It is that science and technology from the outside is the prime force of production, the prime way out for China of its poverty and its weakness. Now, the National Science Foundation of the United States and other parts of the U.S. Government have 13 agreements where we essentially provide science and technology almost for free to the Chinese scientific community. Our corporations, if you visit—when the Commission visits Beijing and Tianjing and so forth, you’ll find these massive laboratories set up by, for example, AT&T/Lucent, fiber optics, the latest photonic switches, and not controlled in any way.

Hmmm…… do you think that back then (2001-2002) by doing this, Lucent had any effect on the amounts of people it laid off in the United States in the last five years? Or, why its stock tanked, going from about $90 a share to 99 cents a share before they got bought out by Alcatel?

UNDEREMPLOYMENT – THE LOST VARIABLE IN ECONOMICS

In this election year, people are concerned about the economy.  The economists’ predictions don’t reflect what is going on in many families.  The economists have to take a look at the whole concept of underemployment, not unemployment in the United States.

Unemployment numbers are meaningless and not reflective of buying power and household sustainability.  The true measure of what is going on is the amount of people that have slipped in salaries from $80-$120K to $30-$45K due to downsizing, outsourcing and layoffs.  One IT person that is contracting today says he is making 20% less than on his previous contract last year.  Another commented, “At least you have a contract”.  All this as oil has doubled in a year and the devaluation of the dollar is around 40%.

Diane Swonk, economist at Mesirow Financial, pointed out there is a shortage of highly skilled people in the United States. The whole concept that there is a shortage of IT professionals is totally wrong.

From an economic standpoint, if there was a real shortage wouldn’t wages for IT people be skyrocketing up and not spinning down?  That is called the law of supply and demand, the last time I cracked open an economics book.  If there was a real shortage, software developers, data base administrators and others would be well into a six-figure range of salaries comparable to doctors and getting a lot of perks, not bargaining for cheap hourly rates with no benefits.

The reality is that we have had labor-dumping in the United States and many high-tech jobs with decent salaries have been diluted because thousands of people have been imported into the United States.  They have not gone home after the NASDAQ crash, and instead companies increased the cheap labor and replaced more highly paid American workers with them.  Other professions are starting to see their jobs erode as more H-1B and L Visas are being allotted.

This might be good for short-term profits, but it adds a lot of fuel on the skyrocketing  foreclosure rates which cannot be blamed on just sub-prime mortgages, as well as the twenty-year low in car sales and the huge increase in personal bankruptcies.

All of this is happening while CEOs like Angelo Mozilo of Countrywide Financial cashed in $404 Million in salary and options in the last couple of years and awaits a severance package of another $115 Million when Bank of America buys out Countrywide.  

Rewarding stupidity and failure with this magnitude of compensation should be more than frowned upon.  The person should be summarily dismissed without any severance package.  There needs to be more board of director reforms to eliminate this type of boardroom lunacy.  His pay should be divided and given to all of the people he put on the street.  What severance packages are they getting from Countrywide?

THE DEMISE OF MICHIGAN

Look to Michigan as a state that has become an example of poor leadership and a totally wrong coalition of government, business, academia and organized labor.

Should we feel sorry for Michigan and the poor state that they are in job-wise as well as their housing market?  I say they drove themselves into a declining vortex of joblessness, aimlessness and no vision to move forward.  That is a strong statement, but look at the two videos which spotlight the lack of focusing on solving local problems.  Both talk about US taxpayer money subsidizing college tuition and job loss to China.

http://www.youtube.com/watch?v=27QOTZy_VQM 

As the video states, “Patriotism is for chumps.”  Policies have been set in companies to maximize short-term gains by transferring manufacturing jobs out to China and higher educational institutions are enticing foreign students with tuition breaks being subsidized by U.S. taxpayers. 

This next video is about the state of Michigan, and the University of Michigan - same author.

(http://www.youtube.com/watch?v=quaD6RLuAio&feature=related)  It talks about shifting endowment money to develop offshore hedge funds and not spend money on supporting local students or start-up businesses, but instead develop venture capital projects in China.   By the way, much of this is taxpayer money.

Here is a link (http://beijing.usembassy-china.org.cn/012605e.html ) to the full speech of the Minister of the American Center for Cultural Exchange at the American Embassy in Beijing.

Any thoughts?  I sent these two videos out to some readers because I was not sure on how credible these videos were.  They were validated by various people including some university professors, who said that even more was going on than what you see here.

It’s funny how everyone claims they do not know how good jobs are evaporating in the United States.  It’s pretty clear to see there are catalysts at academic institutions who on one hand want your support, alumni donations and taxpayer money, while they turn over technology, fund foreign start-ups and even finance cheaper competition instead of helping the communities that they profess they support.

 As for Michigan, drive through it.  That state is devastated and its housing market is a joke.  They will be asking other states to bail them out.  They should be looking at their own business leaders and institutions that sold them out.

Sending money to your alma mater or buying an American car to “support American jobs” which then actually fund foreign initiatives to undermine your job here by creating cheaper competition is at best counter-productive, at worst treasonable if it affects national security.

CARLINI-ISM   Millions of dollars should be spent locally to strengthen our future education and economy first.  Any change left over should be then seeded into international initiatives, not vice versa.