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Ear to the Ground

Factories Echo Recession Pangs

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Posted on Jan 2, 2009
Textile Plant
msnbc.com

The global drop in manufacturing is affecting many forms of factory production, such as textile plants in China.

Following in the footsteps of 2008’s dismal economic news, global manufacturing has fallen to low levels unseen for decades. In the U.S., factory activity has dropped to a 28-year low, marking a slump that further adds to the bad economic trends as we enter 2009.


Reuters:

U.S. factory activity fell to a 28-year low in December as the deepening year-old recession hammered the manufacturing sector, producing a bleak outlook at the start of 2009.

The Institute for Supply Management said on Friday its index of national factory activity fell to 32.4—a figure indicating contraction and the lowest reading since 1980—from 36.2 in November. Its jobs gauge also hit the lowest level since 1982 and prices were the weakest since 1949.

The report on U.S. manufacturing echoed the dour tone set in factory surveys around the globe and indicated rough times ahead, with a gauge of new orders hitting its lowest level ever.

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By Xntrk, January 3, 2009 at 8:37 pm Link to this comment
(Unregistered commenter)

Capitalism is defined by competition. We have a system of Monopolies that agree to set their prices within pennies of each other. The only choice a customer has is in perceived convenience.

Indy-Mac Bank, which was purchased by the government to cover the losses on failed mortgages, has now been purchased by a private equity group and a hedge-fund. The new boss is from Goldman Sachs. The FDIC continues to hold the lion’s share of the bad debts, but now the newly reorganized Mortgage Bank was a steal for private wheelers and dealers.

Ain’t it grand to live where Free Enterprise and Competition ensure that all who are willing to work hard and invest in the stock market can get rich. Of course, if it’s your Retirement Fund that has been invested, Fogettaboutit!

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By felicity, January 3, 2009 at 11:43 am Link to this comment

We lavish money on the financial sector, which ‘refuses’ to reveal to us what they’re doing with it, while we blithely allow the foundations of our economy to sink.

Recently read that we gave Citigroup $20 billion, which at the time would have bought their entire company, but nevermind they generously ‘gave’ us a whopping 7.8 percent equity in the company back.

I’ve finally figured out laissez-faire capitalism. Its dogmatism goes out the window when the finance capitalists want government money.  On the other hand, when labor, foreinstance, needs government money they’re told no because it would be in direct opposition to laissez-faire/free market/capitalism.

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Eric L. Prentis's avatar

By Eric L. Prentis, January 3, 2009 at 9:38 am Link to this comment

President Bush/Congress allowed large corporations to ship US manufacturing jobs overseas, mainly to China and Mexico, in exchange for opening up their financial sector to US companies. The US real economy is sacrificed in the name of free trade, but is actually managed trade, to help the US financial sectors. Now that the financial system is bankrupt and only staying afloat through a reverse bank heist, i.e., the financial ruling class is robbing the Treasury of at least $3+ trillion plus dollars, apologists such as the NYT’s Mr. Mark Landler want the real economy to take the fall for the sins of the financial sector. BULL!!! The bankrupt financial system should be nationalized, a la the Swedish method, and the culpable board of directors, management, equity and debt holders be made to rightly pay for the corrupt and dangerous actions of Wall Street bankers. The tax code, used all these years to ship manufacturing oversees, should be reversed to bring these jobs home.

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