Mammanomics: How to get screwed in the globalized kitchenplace

This morning I saw a very interesting topic on the news: Japan has a butter shortage!

 

My first thought was to write a post about this. Before I could get to it, Rob sent me an equally interesting link on the first recession ever that Starbucks is facing. You can read the article Rob sent me a link to, "The First Starbucks Recession" by the wonderfully propagandized news reporter TIME/CNN .

 

In all honesty I don't like Starbucks coffee. It IS too bitter, exactly as the author of the article said at the end of his commentary. And in all honesty, even though The Starbucks CEO Schultz claims McD's coffee is "less than satisfactory" (he was quoted using the word "swill"), I have found that here in Japan, McDonald's Premium Roast is FAR BETTER than Starbucks' brewed coffee which is, in my opinion, "burned toast". They burn the shit out of their beans which leaves a horridly strong acidic aftertaste in the mouth. Sure, it works for latte's but not all of us want to dope ourselves up on cow hormones and get massive carb-induced sleepies (yes, milk is a BIG carb) from it.

 

And soy latte's? HAHAHAHA. I've talked about how bad for us soy is, so you won't find me drinking that stuff! I have tried all cream latte's, but although I love the taste of cream, a grande cream sat like a huge lump of curds in my tummy and just rolled around there, making me feel ill. So I try the variety of brewed coffees and other "watered down shots" and stuff, but still, they are all too burned in flavour for my "Italian roast spoiled tastebuds". (Yes, it is true, the espresso in Italy is infinitely tastier than that at Starbucks).

 

What I DO like about Starbucks is the atmosphere, a LOT. McDonalds sucks for "atmosphere" and the other coffee shops here are all smoke filled dingy dens, even if they do try to compete with Starbucks. Ugh. But the problem is as the Fox explained, the USA is soooo hard hit by deficit and "middle class cleansing" that the masses (the poor and the rich are at the opposite ends of the economic bell curve) simply cannot afford five bucks a cup!

 

If you read that article, I think you will see that Schultz is not entirely on the mark with his assessment, because he is not taking into account that North Americans (Americans specifically) simply DO NOT HAVE THE CASH to go in for the "five bucks" on a regular basis anymore, and it is only getting worse.

 

"We Japanese" learned through our 15 year repression all about becoming "recessioned". Now it's time for America and their big companies to feel the pinch along with all the consumers who may want to buy a "five bucks" but simply cannot...

 

Back to my main topic of the day: butter and the amazing shortage in Japan!

 

This is an easy lesson on global economics and even a "house mom" who gets sleepy at simply hearing the word "economics" should perk up her ears at this topic because it really DOES affect the household, the family and a whole lot more.

 

It seems that Japan has basically "run out of butter" Yep. It was on the news this morning. It is a massive deficit of that creamy goodness stuff that goes in everything from the croissants and delicious breads the Japanese are maniacs for, to the buttery smoothness of tonkotsu raamen! The patisserie's are getting a fraction of what they need, or none at all. Schools have been forced to change school lunches because they can't get the breads they were using. Prices are rising, demand is strong... but there is NO SUPPLY.

 

What happened?

 

Economics.

 

Global Economics to be more specific.

 

FRIKKIN GLOBALIZATION if you want to know the truth! Globalization in all its glory that the economists and governments and businesses completely ignore when they make their decisions to cut costs by "going global" and importing products and services from overseas based solely on "price competition".

 

Yep. Big business really screwed up this time, and it looks like it's going to take a long time to fix this mess.

 

It is a serious problem.

 

In the past, prices for milk in Japan started to go up. So butter manufacturers decided to buy from India and China. Well, guess what happened out there? Their GDP (income) has increased dramatically, and they are demanding more milk-related products, more grain-related products, more "obesity-related carbohydrates" just like we in the west. They are following on our heels quickly. But because their population is so vastly ginormous compared to ours in the west and here in Japan, the demand for these "new foods" like dairy, cheese in China which was until recently shunned as "not fit for human consumption" has created a giant vortex in the production so that prices have skyrocketed out there, as supply gets all sucked up.

 

I can't blame this entirely on "out there" of course, because the consumption of "designer breads and pastries" as well as cheese products is skyrocketing here as well, eating up huge amounts of milk products before it ever gets turned into butter (the last thing on the milk-product food chain to be made).

 

In the past Japan was buying a ton of milk from China and India to meet the demand, and throwing out the more expensive Japanese milk because nobody here would buy it at the high prices. Then prices out there went up as it does when more people want something (that was the economics lesson by the way, right there), and they stopped using the foreign milk.

 

So the companies that produce butter have tried to return to using the now "cheaper" Japanese milk, but because they stopped using the J-Milk processors and dairy farms here a lot of dairies went teats up. So guess what that means? It means that now there is not enough supply here in Japan to be shunted off for butter production and for the first time ever, there is a SERIOUS shortage of butter. This is causing major problems across the land here, and not just in the home kitchen, but in retail as well.

 

So, thanks to "globalization", we are not only screwing our blue and white collared middle class "bread winners", we are screwing all of the mamma's working hard to feed their children, keep within the budget and try to stay alive amid dwindling salaries, skyrocketing healthcare, and basic loss of position in the social bell curve.

 

You can read this good article from the Japan Times Online, "Butter supplies running short at supermarkets" , written April 6th. Today, three days later, we are actually at a more dire situation than they let on here, as seen on TV news this morning.

 

On a final note, I just want to say that I sure hope the Margarine manufacturers don't capitalize on this and "marketize" (brain wash through marketing) the kitchenplace to convince them (again) that margarine is "good for you". It isn't. It's one of the worst things you could EVER put in your mouth. A plastic food that won't ever rot is scary enough, but when you understand how it works on a biochemical level and takes over the receptors that require healthy Essential Fatty Acids that are found in butter, cheeses, proteins, eggs and stuff, and basically prevents the cells from GETTING what they really need... and you begin to see the true health nightmare that "no cholesterol!" margarine has done to our health. It is a true "fake food" not fit for even our worst nightmare enemies and ghouls!

 

It's lunchtime, and I'm hungry so I'm heading over to the kitchen, going to open up the fridge and enjoy a nice cold slice of delicious (and expensive) designer butter.....

 

I... *tummy rumbling*... love you!

 

Cam

Politics & Numbers 2 - Paul Craig Roberts on the loss of jobs in America

Normally I wouldn't post this kind of stuff. I prefer to read it in silence and feign interest in the current political situation in the west. The problem is that when the US falls, it will take us all down with it. And it doesn't look like the economy is heading for an upswing any time soon, either, considering the HUGE trade deficit and the amount of foreign borrowing that is required to keep the economy hobbling along in its current diseased state.

Especially in this case, what you don't know WILL hurt you.

I think I need another triple espresso after reading this one. You may too, but it will be worth it since it provides a better understanding regarding actual situation of the American economy, the GDP, and the loss & creation of jobs.

Enjoy. I did.

Oh, one last thing! I highly recommend following some if not all of these links in the two posts because you will get a MUCH better picture of how thin the ice really is beneath your feet.

Non-politically yours...

Cameron

P.S. You may also want to read Roberts' thoughts on Obama and Global Trade where he explains how "the U.S. government is essentially bankrupt", how official statistics (he doesn't list them, but you can look them up if you wish) show "no growth in median family income in many years", and how Senator Obama's proposed plan for "a lower tax rate for US companies that maintain or increase their US workforce relative to their overseas workforce [Obama seeks Ohio’s blue-collar vote, By Edward Luce, February 19 2008]... shows more serious thought than can be found among Washington policymakers and the economics profession." 

******************************

No Jobs for the New Economy or the Old
By Paul Craig Roberts
January 07, 2008  

http://www.vdare.com/roberts/080107_jobs.htm

December did not bring Americans any jobs. To the contrary, the private sector lost 13,000 jobs from the previous month.

If December is a harbinger of the New Year, it is going to be a bad one. The past year, hailed by Republican propagandists and "free trade" economists as proof of globalism’s benefit to Americans, was dismal. According to the Bureau of Labor Statistics’ nonfarm payroll data, the US "super economy" created a miserable 1,054,000 net new jobs during 2007. [BLS Job Numbers, January 4, 2008]

This is not enough to keep up with population growth—even at the rate discouraged Americans, unable to find jobs, are dropping out of the work force—thus the rise in the unemployment rate to 5%.

During the past year, US goods producing industries, continuing a long trend, lost 374,000 jobs.

But making things was the "old economy." The "new economy" provides services. Last year 1,428,000 private sector service jobs were created.

Are the "free trade" propagandists correct that these service jobs, which are our future, are high-end jobs in research and development, innovation, venture capitalism, information technology, high finance, and science and engineering where the US allegedly has such a shortage of scientists and engineers that it must import them from abroad on work visas?

Not according to the official job statistics.

What occupations provided the 1.4 million service jobs in 2007?

Waitresses and bartenders accounted for 304,200, or 21% of the new service jobs last year and 29% of the net new jobs.

Health care and social assistance accounted for 478,400, or 33% of the new service jobs and 45% of the net new jobs. Ambulatory health care and hospitals accounted for the lion’s share of these jobs.

Professional and business services accounted for 314,000, or 22% of the new service jobs and 30% of the net new jobs. Are these professional and business service jobs the high-end jobs of which "free traders" speak? Decide for yourself. Services to buildings and dwellings account for 53,600 of the jobs. Accounting and bookkeeping services account for 60,500 of the jobs. Architectural and engineering services account for 54,700 of the jobs. Computer systems design and related services account for 70,400 of the jobs. Management consultants account for 88,400 of the jobs.

There were more jobs for hospital orderlies than for architects and engineers. Waitresses and bartenders accounted for as many of last year’s new jobs as the entirety of professional and business services.

Wholesale and retail trade, transportation, and utilities accounted for 181,000 of 2007’s new jobs.

Where are the rest of the new jobs? There are a few scattered among arts, entertainment, and recreation, repair and maintenance, personal and laundry services, and membership associations and organizations.

That’s it.

Keep in mind that the loss of 374,000 goods producing jobs must be subtracted from the 1,428,000 new service jobs to arrive at the net job gain figure. The new service jobs account for more than 100% of the net new jobs.

Keep in mind, too, that many of the new jobs are not filled by American citizens. Many of the engineering and science jobs were filled by foreigners brought in on work visas. Indians and others from abroad can be hired to work in the US for one-third less. The engineering and science jobs that are offshored are paid as little as one-fifth of the US salary. Even foreign nurses are brought in on work visas. No one knows how many of the hospital orderlies are illegals.

What a super new economy Americans have! US job growth has a distinctly third world flavor. A very small percentage of 2007’s new jobs required a college education. Since there are so few jobs for university graduates, how is "education the answer"?

Where is the benefit to Americans of offshoring? The answer is that the benefit is confined to a few highly paid executives who receive multi-million dollar bonuses for increasing profits by offshoring jobs. The rest of the big money went to Wall Street crooks who sold trusting people subprime derivatives.

"Free traders" will assert that the benefit is in low Wal-Mart prices. But the prices are low only because China keeps its currency pegged to the dollar. Thus, the Chinese currency value falls with the dollar. The peg will not continue forever. The dollar has lost 60% of its value against the Euro during the years of the Bush regime. Already China is having to adjust the peg. When the peg goes, Wal-Mart shoppers will think they are in Neiman Marcus.

Just as Americans have been betrayed by "their" leaders in government at all levels, they have been betrayed by business "leaders" on Wall Street and in the corporations. US government and business elites have proven themselves to be Americans’ worst enemies.

Politics & Numbers 1 - Paul Craig Roberts on the death of the American economy

It is understandable that in debate, people often require "numbers" for proof. "Show me the money" is a common request for proof that an idea is successful, or "right". This is based on "the bootom line is everything" mentality. 

Numbers can be easily manipulated by statisticians to say what they are paid to report. Big business "cooks the books" all the time.

One of the things that has become fairly well known over the past few years is that most economists are pretty much blind to the reality of the situation in the real world as they hang onto their tried and true perceptions of how they think the world should be progressing.

Here is a long, but extremely well-written and informative article by Paul Craig Roberts, one of the better economists living today. He and Paul Krugman are about the only two that you can really trust to bring the "real life situation" to the public.

I highly recommend reading through this to have a better understanding about the REAL situation of the U.S. economy and where it is headed. And when you are done with that, please read the next blog that I post as well. It provides data from 2007. It is a pretty glum situation out there, and not at all like the picture the current Bush Administration seems to be painting.

Always remember this tried and true scientific approach to developing theories: It takes an infinite amount of experiments to prove something is right, but only one to prove it is wrong. We are better off admitting that we were wrong, or didn't understand the greater picture than to stubbornly stick to what we perceive is true, even when the foundations of that perception are crumbling down around us.

- Cameron

Analysis
American economy: R.I.P.
By Paul Craig Roberts
Online Journal Guest Writer
http://onlinejournal.com/artman/publish/printer_2401.shtml

Sep 11, 2007, 00:36

The US economy continues its slow death before our eyes, but economists, policymakers, and most of the public are blind to the tottering fabled land of opportunity.

In August, jobs in goods-producing industries declined by 64,000. The US economy lost 4,000 jobs overall. The private sector created a mere 24,000 jobs, all of which could be attributed to the 24,100 new jobs for waitresses and bartenders, and the government sector lost 28,000 jobs.

In the 21st century, the US economy has ceased to create jobs in export industries and in industries that compete with imports. US job growth has been confined to domestic services, principally to food services and drinking places (waitresses and bartenders), private education and health services (ambulatory health care and hospital orderlies), and construction (which now has tanked). The lack of job growth in higher-productivity, higher-paid occupations associated with the American middle and upper middle classes will eventually kill the US consumer market.

The unemployment rate held steady, but that is because 340,000 Americans unable to find jobs dropped out of the labor force in August. The US measures unemployment only among the active work force, which includes those seeking jobs. Those who are discouraged and have given up are not counted as unemployed.

With goods producing industries in long-term decline as more and more production of US firms is moved offshore, the engineering professions are in decline. Managerial jobs are primarily confined to retail trade and financial services.

Franchises and chains have curtailed opportunities for independent family businesses, and the US government’s open borders policy denies unskilled jobs to the displaced members of the middle class.

When US companies offshore their production for US markets, the consequences for the US economy are highly detrimental. One consequence is that foreign labor is substituted for US labor, resulting in a shriveling of career opportunities and income growth in the US. Another is that US Gross Domestic Product is turned into imports. By turning US brand names into imports, offshoring has a double whammy on the US trade deficit. Simultaneously, imports rise by the amount of offshored production, and the supply of exportable manufactured goods declines by the same amount.

The US now has a trade deficit with every part of the world. In 2006 (the latest annual data), the US had a trade deficit totaling $838,271,000,000.

The US trade deficit with Europe was $142,538,000,000. With Canada the deficit was $75,085,000,000. With Latin America it was $112,579,000,000 (of which $67,303,000,000 was with Mexico). The deficit with Asia and Pacific was $409,765,000,000 (of which $233,087,000,000 was with China and $90,966,000,000 was with Japan). With the Middle East the deficit was $36,112,000,000, and with Africa the US trade deficit was $62,192,000,000.

Public worry for three decades about the US oil deficit has created a false impression among Americans that a self-sufficient America is impaired only by dependence on Middle East oil. The fact of the matter is that the total US deficit with OPEC, an organization that includes as many countries outside the Middle East as within it, is $106,260,000,000, or about one-eighth of the annual US trade deficit.

Moreover, the US gets most of its oil from outside the Middle East, and the US trade deficit reflects this fact. The US deficit with Nigeria, Mexico, and Venezuela is 3.3 times larger than the US trade deficit with the Middle East despite the fact that the US sells more to Venezuela and 18 times more to Mexico than it does to Saudi Arabia.

What is striking about US dependency on imports is that it is practically across the board. Americans are dependent on imports of foreign foods, feeds, and beverages in the amount of $8,975,000,000.

Americans are dependent on imports of foreign Industrial supplies and materials in the amount of $326,459,000,000 -- more than three times US dependency on OPEC.

Americans can no longer provide their own transportation. They are dependent on imports of automotive vehicles, parts, and engines in the amount of $149,499,000,000, or 1.5 times greater than the US dependency on OPEC.

In addition to the automobile dependency, Americans are 3.4 times more dependent on imports of manufactured consumer durable and nondurable goods than they are on OPEC. Americans no longer can produce their own clothes, shoes, or household appliances and have a trade deficit in consumer manufactured goods in the amount of $336,118,000,000.

The US “superpower” even has a deficit in capital goods, including machinery, electric generating machinery, machine tools, computers, and telecommunications equipment.

What does it mean that the US has a $800 billion trade deficit?

It means that Americans are consuming $800 billion more than they are producing.

How do Americans pay for it?

They pay for it by giving up ownership of existing assets -- stocks, bonds, companies, real estate, commodities. America used to be a creditor nation. Now America is a debtor nation. Foreigners own $2.5 trillion more of American assets than Americans own of foreign assets. When foreigners acquire ownership of US assets, they also acquire ownership of the future income streams that the assets produce. More income shifts away from Americans.

How long can Americans consume more than they can produce?

American over-consumption can continue for as long as Americans can find ways to go deeper in personal debt in order to finance their consumption and for as long as the US dollar can remain the world reserve currency.

The 21st century has brought Americans (with the exception of CEOs, hedge fund managers and investment bankers) no growth in real median household income. Americans have increased their consumption by dropping their saving rate to the depression level of 1933 when there was massive unemployment and by spending their home equity and running up credit card bills. The ability of a population, severely impacted by the loss of good jobs to foreigners as a result of offshoring and H-1B work visas and by the bursting of the housing bubble, to continue to accumulate more personal debt is limited to say the least.

Foreigners accept US dollars in exchange for their real goods and services, because dollars can be used to settle every country’s international accounts. By running a trade deficit, the US insures the financing of its government budget deficit as the surplus dollars in foreign hands are invested in US Treasuries and other dollar-denominated assets.

The ability of the US dollar to retain its reserve currency status is eroding due to the continuous increases in US budget and trade deficits. Today the world is literally flooded with dollars. In attempts to reduce the rate at which they are accumulating dollars, foreign governments and investors are diversifying into other traded currencies. As a result, the dollar prices of the Euro, UK pound, Canadian dollar, Thai baht, and other currencies have been bid up. In the 21st century, the US dollar has declined about 33 percent against other currencies. The US dollar remains the reserve currency primarily due to habit and the lack of a clear alternative.

The data used in this article is freely available. It can be found at two official US government sites: Bureau of Economic Analysis: U.S. International Transactions Accounts Data and Bureau of Labor Statistics. Employees on nonfarm payrolls by industry sector and selected industry detail.

The jobs data and the absence of growth in real income for most of the population are inconsistent with reports of US GDP and productivity growth. Economists take for granted that the work force is paid in keeping with its productivity. A rise in productivity thus translates into a rise in real incomes of workers. Yet, we have had years of reported strong productivity growth but stagnant or declining household incomes. And somehow the GDP is rising, but not the incomes of the work force.

Something is wrong here. Either the data indicating productivity and GDP growth are wrong or Karl Marx was right that capitalism works to concentrate income in the hands of the few capitalists. A case can be made for both explanations.

Recently an economist, Susan Houseman, discovered that the reliability of some US economics statistics has been impaired by offshoring. Houseman found that cost reductions achieved by US firms shifting production offshore are being miscounted as GDP growth in the US and that productivity gains achieved by US firms when they move design, research, and development offshore are showing up as increases in US productivity. Obviously, production and productivity that occur abroad are not part of the US domestic economy.

Houseman’s discovery rated a Business Week cover story last June 18, [The Real Cost Of Offshoring, by Michael Mandel] but her important discovery seems already to have gone down the memory hole. The economics profession has over-committed itself to the “benefits” of offshoring, globalism, and the non-existent “New Economy.” Houseman’s discovery is too much of a threat to economists’ human capital, corporate research grants, and free market ideology.

The media has likewise let the story go, because in the 1990s the Clinton administration and Congress overturned US policy in favor of a diverse and independent media and permitted a few mega-corporations to concentrate in their hands the ownership of the US media, which reports in keeping with corporate and government interests.

The case for Marx is that offshoring has boosted corporate earnings by lowering labor costs, thereby concentrating income growth in the hands of the owners and managers of capital.

According to Forbes magazine, the top 20 earners among private equity and hedge fund managers are earning average yearly compensation of $657,500,000, with four actually earning more than $1 billion annually. The otherwise excessive $36,400,000 average annual pay of the 20 top earners among CEOs of publicly-held companies looks paltry by comparison.

The careers and financial prospects of many Americans were destroyed to achieve these lofty earnings for the few.

Hubris prevents realization that Americans are losing their economic future along with their civil liberties and are on the verge of enserfment.

[See also: National Data, Immigrant Displacement Of American Workers Booms Amid The Job Bust, By Edwin S. Rubenstein]

Paul Craig Roberts [email him] was Assistant Secretary of the Treasury in the Reagan Administration. He is the author of Supply-Side Revolution : An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click  here for Peter Brimelow’s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.

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