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Last Chance

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Business has been picking up. We got caught out by unexpected sales driven by desperate promotions, followed by major months-long issues with our supply of steel (almost as important as electricity). We’re behind the curve, and we have been hiring back some production people to help ramp up production.

I ran into one of those people on Friday. I was surprised to see her as she had been let go quite a long time ago, before the cutbacks had affected any salaried employees. There could be more to this story, complexities I am not aware of, but the effect of seeing someone so far back in the queue working again was to provoke the suspicion that many people earlier in line had turned down the opportunity to work here. And I doubt too many of them have jobs elsewhere.

I’ve been told before that statistically we are very competive in our pay and benefits for this area. And I’ve heard stories from the other manufacturing facilities that can make this place seem enlightened. I wonder if the lack of enthusiasm for returning to work for Acme should reflect on Acme’s reputation, or on the work ethic of the departed? I know some of the salaried people had every intention of running out the last drop of their unemployment.

The best thing I could make of it is perhaps this person had a good reputation and was preferred on the call-back. But this doesn’t line up with my understanding of the context of her departure. So I am pretty sure it is a bad sign one way or the other.

Two different reasons for hiding data

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Today I have science on the brain. Or at least some vague approximation of the word (I have real trouble spelling it, for some reason).

I spent some time reading up on Robert Hooke just because I did not know much about him other then he was Newton’s nemesis.

Reading it made me kind of depressed. If you ever get to thinking that you’re smart, you should read about some of the early giants of the enlightenment. When they weren’t making ground breaking discoveries in 42 separate areas of study (all of which they were pursuing at the same time), they were designing buildings, hard to counterfeit currencies, and building better watches. I think they benefited greatly from living in a time that was wealthy enough that many men could devote themselves to thought and yet it was still expected that a man of thought would be able to build things with his own hands.

But be that as it may, those biographies of early scientists are depressing for reasons other then how small they make us feel. The early giants of the scientific revolution repeatedly demonstrated they could be awfully small minded. They stole ideas from each other and did not give credit. They jealously guarded their own data and ideas lest someone else steal them. They slandered each other and tried to destroy all the works that their opponents left behind.

Reading all of those things, one can’t help but think of the recent climategate scandal. One is tempted to trot out the old adage “the more things change, the more things stay the same.”

But there is a crucial difference. The early giants of the scientific revolution had ideas that would change the world and stand the test of time. And they knew the value of what they had. That is why they fought like cats and dogs over who thought up the ideas first.

On the other hand, the scientists involved in global warming research have no clue what they are doing. They can’t even reproduce their own work, much less have it be tested by others. They hide their data not because they know it is of great worth, but because they know that it is next to worthless (and that’s being kind.)

Rumblings of the Big One

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Today I hear a rumble. I see everything starting to shift. I think there is an earthquake coming.

Words that should scare you…

As of July 2009, California’s budget shortfall was 49.3% of its general funds. States have considered drastic options to fill such gaps.

“I looked as hard as I could at how states could declare bankruptcy,” said Michael Genest, director of the California Department of Finance who is stepping down at the end of the year. “I literally looked at the federal constitution to see if there was a way for states to return to territory status.”

From later on in the same article….

Mr. Genest estimated that, eventually, 40% of the state’s budget would go to the state Medicaid program, 40% to education, 10% to debt service and 6% to retiree medical services and pension—leaving little left for anything else, such as the state’s corrections system.

In other words, California is going to choose hand outs over maintaining public order. The lowering of crime rates over the last twenty years was achieved by throwing lots and lots of people in jail. We are going to see violent crime rates climb as states decided that they can not afford to keep people in jails.

But it is not just California…..

The real talking was done Monday, when Mr. Paterson was at his articulate, compelling best, explaining the budget crisis in terms even someone otherwise oblivious to deadlines and consequences and seemingly any pressure to confront them might still understand.

“Unless immediate action is taken, we will have challenges to our state’s finances and to our cash flow in four and a half weeks,” the governor said.

Translation: New York State is not going to have enough money to pay all of its bills in a month.

Not a surprise when you consider this…..

New York spends $2,283 per capita on Medicaid, far more than any other state and twice the national average, according to statistics compiled by the state budget division. Second is Rhode Island, which spends $1,659. The state also spends $14,884 per pupil on school aid, more than any other state and well above the national average of $9,138.

But of course, it is not just America that is facing these kinds of problems….

Chang argues that inconsistencies in Chinese official statistics — like the surging numbers for car sales but flat statistics for gasoline consumption — indicate that the Chinese are simply cooking their books. He speculates that Chinese state-run companies are buying fleets of cars and simply storing them in giant parking lots in order to generate apparent growth.

Another data point cited by the bears: overcapacity. For example, the Chinese already consume more cement than the rest of the world combined, at 1.4 billion tons per year. But they have dramatically ramped up their ability to produce even more in recent years, leading to an estimated spare capacity of about 340 million tons, which, according to a report prepared earlier this year by Pivot Capital Management, is more than the consumption in the U.S., India and Japan combined.

This, Chanos and others argue, is happening in sector after sector in the Chinese economy. And that means the Chinese are in danger of producing huge quantities of goods and products that they will be unable to sell.