Sunday, May 24, 2015

The Lethality of the Invisible Hand

A childhood friend posted this on FB a couple of days ago and I read it quickly since I am originally from Alabama, lived in a family fueled by steel mill wages and have steel DNA flowing through me to this day. I worked in that huge Republic Steel  plant the summer of 1966 in Gadsden, AL; now completely shuttered and sold for scrap iron to China.  At my mother's funeral, she worked at that plant also during World War II, I was able to look out at the skeletal remains of that mill that employed thousands of men and women for many years. My grandfather organized the United Steel Worker's Union for that plant in the 1920s and was physically abused by the thugs in trying to prevent that from happening. All of that to say that I feel I have a pretty good handle on the Gadsden steel mill. I ate it, smelled it, heard it, lived it; it was our life two streets over from the bells, whistles and clanging of huge steel pipes and railroad engines.  That, however, was another time, another chapter, the closing days of a strategic shift in the globalization of commodity manufacturing in America; an America that had global dominance from the leadership of ruined dust bowls of nations from the devastation of the war in steel, tires, cars, etc, etc.
The steel industry in Alabama today, per the news piece, is a classic illustration and example of the lethality of Adam Smith's Free Market Invisible Hand. It is all about competition for it is all about the consumer seeking more choices and better quality and ever reducing prices.  THAT is the Free Market. There are winners and there are losers! The macro reason for the contraction of steel in Alabama is China as China transitions from an export based economy to and import based economy.  China was a major buyer of American made steel as was most of Europe in the years after World War II as was Japan and South Korea. As technology, free trade zones, cheaper wage labor became more and more dominant IN ORDER TO LIVE IN THE SHADOW OF THE INVISIBLE HAND, the American steel and tire and auto and etc, had choices to make as to how they spent their capital, how they worked with the human capital and how they embraced the globalization.  American steel makers generally chose to ignore the forces of globalization out of arrogance for America had always been the Big Dog in the House; no more!
Threading through all of this transition, actually transformation, was the stubbornness, expanding rule books and restrictions driven by the organization of unions in American manufacturing.  I will insert here a personal view on this for during that summer of 1966 as an eighteen year old kid working night shifts in the steel plant, I was appalled as the poor productivity, the astounding waste of time, over manning on jobs, sleeping five and six hours a shift, underground rooms with magazine racks where soft drinks could be bought, lawn chairs for sleeping, etc, etc. The relationships with the foremen and the workers was simply terrible. No respect, unions protecting workers known for poor performance, historically missing work shifts and controversy was at the core of labor relations.  That is a reality for both management and labor but a mantra for change that globalization of the industry forced.  Unions and Management chose to ignore to maintain a poorly productive status quo. The result was that as the waves of globalization washed the US steel, tire, auto, etc. market, bankruptcies became the norm as you will remember. I am now in the 1980s time period!
During that same time frame, Southeastern United States began a new system called Right-to-Work meaning people had the choice of being in a union or not and the choice was overwhelmingly Not.  As a result, foreign transplant auto firms began multi-trillion dollar capital flows into the US turning the SEUS into global export for steel, tires, autos, etc. Let that sink in for a minute! But the unions are collecting billions of dollars and dues from a shrinking workforce to grease political coffers to keep RTW out of the Rust Belt and to constantly attack the productive operations in the SEUS location; a losing battle but more and more destructive to steel families. Plants closed enmasse, bankruptcies being gobbled up by French and Luxembourgish and Indian steel giants cutting out all benefits for retirees and their descendants. My mother is a classic example of this reality!
It is a tragic, sickening story but it is a story of the machinery of the Invisible Hand. Whining will not fix a poor situation that was creating and spawned over decades for then it becomes cultural; thus what I describe above.  Some will read that above and will not like it but facts are facts and I lived the facts as did many that may or may not read this.  As the wheels of the Hand continued to cut through the waves of the sweeping globalization, China, to protect her own growing 1.4 billion consumers, had to invest capital into core industries to ensure availability of good and services for the population; steel, auto, tires, etc, for example.  With all the shifting described above, China in the year 2000 had 64 high tensile steel plants, huge and brand new high technology steels mills in operation or under construction. What the result was a global glut of steel production capacity.  That over capacity was high grade, much cheaper steel for the consumer so, where would you buy?
It is painful to see the Invisible Hand at work but it is more frustrating to witness the lack of strategic planning and execution by industry executives to do what is necessary to increase the higher value production; not whine and politic to get jobs back that are gone and gone forever. That has never happened in the economic history for America has transitioned from an Industrial-driven economy into an Information / Service GDP nation. China is heavily into their own Manufacturing economy and they are doing a much better job than America did in positioning itself for the global view on steel, tires, auto, etc.
I will close by stating that America has lost its footing and vision driven leadership fueled by inept political leadership which we all are painfully witnessing on many fronts. In economics, you do not back back; you move ahead faster and better than the competition. We Consumers demand that!

Thursday, May 21, 2015

A View from the Cheap Seats

Last evening with my long legs jammed into 1940 era wooden seats with this 400 pound man sitting in front of me jamming my knees into my elbows watching a graduate recognition program, my mind stepped back from the clamor of names being called and things being handed out to the cacophany of applause of parents and grandparents and looked at the event through a different lens. This assessment of projection continued long after the event was over and even to this morning. I know, before I describe, that the other components of my life created the coloration of the lens through which my mind was assessing today looking ahead to the tomorrows.

A gay administrator, dozens of children all excited to be moving to the new, next grade in school, seeing many different configurations of parents meaning multiple attempts at marriage that fell apart with new spouses entering the lives of the kids being celebrated. Add to that, for me, my ten years of university teaching some of which had sat in that same old gynasium listening the the same cackle of applause plus the other dimension of my life, tweleve years working in jail and prison ministry some of those souls having sat in those same seats listening to their vintage applause. My mind began to process with all those streams coming to confluence about what lay ahead for this year's occupants of the gym seats; thus why I call this a View from the Cheap Seats.

So much hope, so much joy, so much desire, so much excitment; that was the elixir of last night from the view of those cheap seat occupants which was right and normal and good. But in looking ahead from my vantage of so many thousands of prisoners and students in these last few years of my life knowing some of these kids last night were linked via blood or relationships to those in the orange or blue jumpsuits or sitting in my classes, my heart heavied at the world into which these young cheap seat occupants were about to cast their nets of hope into.

See, our world is so very much different than the world that existed when I sat in the cheap seats in the late 1950s. Much of the details I do not recall but I knew even with the craziness of my life then, life felt okay. But when factoring into today the algebra of divorce rates, crime rates, drug abuse rates, societal deteroriation stories and statistics, student loan debt, very poor political leadership, a world seemingly on fire and getting hotter; those factors along cause me great concern for these kids with nets in hand looking and wanting things just to be good and calm and peaceful. They are not!

As I watched the unfolding of the program, I found myself retreating to this quiet, disconnected place where my mind processes and projects. That can be a scary place but a place like that exists in my psyche. I yearn for these kids, including my amazing grandchildren, to find their path and the light to guide their journey early. I long for them to be strong enough to withstand the forces that would pull them down and away from their potential to break loose from the chains of constraint and seek the sunshine of enlightenment and success personally and professionaly. I want to be there to protect and example the right and wrong but that is not the place for a grandparent I realize. The root structure for that work resides inside their homes with parents and siblings with grandparents there to encourage, love and nurture the seeds planted by their parents, our children!

These kids will rise and fall in a world where LGBT is more the norm than the exception. These children will see aberrant family situations that will become a new norm. These young people will come to accept the shock of suicides and drug abuse as part of the process instead of the horrific reality it is. I have witnessed that first hand in so many of my university students so I know this new crop coming up will be even more desensitized. That is exactly what Satan yearns to have happen for the Wrong to be viewed as Right and what is Right to be cast into the sea of doubt and disbelief.
I realize at this stage of my life that I invested far too much of myself into my work and not nearly enough into my two amazing children. They needed more of their dad than they got and for that I am deeply apologetic. But if there is salve for that hurt it comes in the form of grandchildren and the five I have lift me each time I am near them. Seeing those young kids last night and now another large group at another graduation this morning, I find myself saying a quick prayer for each as they cross that stage for God will touch them, guide them, protect them and give them clarity of mind to make right choices in friends, actions, desires.
We as parents, grandparents, friends have a solemn responsilbity to this generation as it stretches its arms toward the sun but the sun is much, much different than the sun of my cheap seat years. There is great challenge but still there is astounding opportunity for right choices. Pray for this generation adn their parents to turn or return to the place God created them to be which is focused on His teachings, His Scriptures, His Example.

Tuesday, May 12, 2015

Light in the Tunnel

Good morning on this simply beautiful morning in NE Ohio.  Was in South Carolina on the Isle of Palm last week and thoroughly enjoyed the drive, 683 miles, the weather, the quaintness of the place, the people, the service at the hotel, the seafood meaning I can never again eat at Red Lobster in my life knowing it is frozen for weeks before it makes it to a plate, really enjoyed the city of Charleston including a quick drive through the campus of the Citadel.  Yes, a good week but the caveat to that was no laptop, minimized TV viewing meaning I was on the third ring of Saturn as to knowing what was going on in our ever changing world. Perhaps that is why I enjoyed the trip and slept so well!
So here we are on a cool, clear Tuesday morning and seeing a new, terrible earthquake in Nepal, ISIL growing stronger and more deadly, watched another intriguing Charlie Rose interview with Mike Morrell, former CIA and NSA director and always enlightening.  What was underscored through that interview simply is that Iran is emerging as the power player in the Middle East perceptually due to Iran's new "partner", the Obama United States.  The Gulf conference in Washington has been snubbed now by at least four Gulf country leaders headed by Saudi Arabia thus rebuffing our POTUS due in large part to this strange affiliation Mr Obama appears to have established with Iran.  Stated: ISRAEL MUST BE REMOVED FROM THE FACE OF THE EARTH.  Let that soak in for a few minutes for those words and sentiments have emanated from the very lips of the Supreme Leader of Iran as well as operatives like Al Qaeda and ISIL. So, seems to me there is reasonable belief that the ultimate objective is the elimination of Israel coupled with the establishment of an Iranian led-caliphate that will be dominated by the Shia while the Sunnis murder each other. Oh, and by the way, just saw where the number of people in America claiming to be Christian has dropped by nearly 10%. I believe there are many dots to be connected in that paragraph.
The escalating racial divide in our own nation coupled with this unparalleled attack on uniformed police across our nation is more troubling to me personally than the above paragraph litany. If this were a kindergarten class I would call a "time out" but that is far too simple in this cauldron of hate, angst, fear and disgruntlement.  I took issue with Mrs. Obama's racial-inflammatory remarks at Tuskegee University's graduation when and where I would think and hope the First Lady would have sought to bring peace. But she took issue that she had been held to a different standard because she was black and that each of those graduates would as well. The First Lady should be held to a different standard not because he is black but because of the position she holds.  I should be held to a different standard, for example, because I live in the North but grew up in the South and claim Jesus as my Savior. I admit it; I want to be held to a different standard. I believe you get my point!
I cannot escape this eery sense there is a plan in place to incite the fires of racism while this president is still in office that will divide our nation on a scale we have not witnessed. I do hope I am wrong but my gut keeps telling me that is the a master plan. The whole socialization via the Democratic folks, ie, ObamaCare, is yet another piece in that puzzle I believe.  The scary part is that the other side of the aisle cannot get organized with a cohesive plan nor candidate to carry the POTUS banner in 2016. Thus, Mrs. Clinton, right now, will by default find she and Billy in the White House and the juggernaut will pick up more speed.  
Yes, my name is Jim and we have a problem, don't we?