Wednesday, April 26th
Richard Stuebi wrote here on Monday, “It’s the Jobs, Stupid.” It certainly is, and it’s an argument for establishing renewable energy that I wholeheartedly champion. It’s also why Kevin Phillips’ “American Theocracy”—a book not without polemic, according to The New York Times, was a rough read.
Pride goeth before the fall, writes Phillips. Unfortunately, he’s not talking about a seasonal summertime loss of self-esteem. Overlay onto the United States the catalysts for the downfalls of the former hegemonies Rome, Holland, Spain and England (imperial hubris, religious zealotry, energy dependence, and indulgence of a ‘borrower-industrial complex’ that forsakes manufacturing) to see the disturbing similarities. You might say the book is the economic/ political/ religious sister to Jared Diamond’s “Collapse.” Both ring loud alarms to rouse the public and its leaders out of stupors of fiction, denial and misdirection. Both say there is time and opportunity to change course and outcome.
As a marketer of cleantech in the U.S., I hope so.
In the U.S., says Phillips, we have a debt problem (which I cover today) as well as a dying manufacturing base (which I will cover next week).
Last week I met with Jim Welch and his staff at Sun Electric Systems, Inc., a small but successful solar energy company in Colorado, to talk about business development opportunities. Jim has been involved in solar for decades, building a solar company which he sold to Kyocera and then venturing overseas. Recently, he has met with U.S. Senator Ken Salazar, a proponent of clean energy, to deliver the message: the U.S. (and Colorado) need more manufacturing. The staff of Sun Electric Systems will be flying to Germany this June to attend Intersolar 2006, believing that the real activity in the solar sector is happening overseas.
“American Theocracy” goes a long way in explaining why Jim and his staff are heading to Europe this summer: “It’s Manufacturing, Stupid.” Before we get to the matter of manufacturing, U.S. debt deserves a good, hard look: If Jim returns from Germany with great cleantech product to sell in the U.S., as I suspect he will, who’s going to buy it? To whom will marketers be selling?
Here are a few chapter titles from Part III of “American Theocracy”: Borrowed Prosperity: Uncertain politics, and the financialization of the United States; The precarious trajectory of American debt; The emergence of the U.S. debt and credit-industrial complex; Debtor society, credit-card nation; Greed and the 1995-2005 credit bubble.
Marketers, greed and gullibility helped get us here.*
Ø “In 1980 Americans collectively put aside a net 7.4 percent of national income. By 1990 that had fallen to 4.5 percent, and by 2005 to a record-low negative savings rate.”
Ø “Noting how consumer spending accounted for more then two-thirds of the $11 trillion national economy, The New York Times summarized that ‘the machinery of American marketing, media and finance all encourage the consumption habit. Many consumers are unable to resist the overpowering mantra: spend, spend, spend.’”
Ø “Sociologist Robert Manning…detailed how banking deregulation during the late 1990s facilitated an ‘enormously successful mass marketing campaign’ that ‘dramatically altered American attitudes toward consumer credit and debt.’” (One that encourages as-yet-unemployed youth and soon-to-be retirees, as well as everyone else, to borrow like mad.)
Contrasting Phillips’ history of the debt-and-credit buildup, NPR reports this week that consumer confidence is up—the highest it’s been in four years, but that higher oil prices could put a damper on spending. It reports that the economy is strong as jobs come on line, despite the national debt and the deficit. NPR also reports that housing market indicators (as deciphered and delivered by a real estate industry spokesperson) show a cooling but strong housing market, although the inventory of unsold houses is very high.
Shake those pom-poms.
This news comes just weeks after NPR reported, in some markets, an increase in foreclosures, slowed housing price appreciation, and an increase in ‘creative’ mortgage financing (interest only loans, ARMs—$2 trillion of which will come up for renewal in two years). On the personal front, this week Citibank offered me yet another credit card. This one is pre-approved with a $100 gift card and 10,000 bonus points toward a free rewards program—and a default APR of 31.49%. Unnervingly, the time between receipt of the statement (via snail-mail) from my long-standing credit card and its due date seems to be shrinking. The credit card company recommends that I pay online to avoid possible late fee charges. Any fond feelings I once had for my credit card company—and there were some—went by the wayside years ago. Freebies can’t erase the lingering stench of usury.
So while we are encouraged to spend, spend, spend, and the mainstream news reports (almost all) things dandy, the things we buy, buy, buy are manufactured in East Asia (goods) or produced by the Middle East (oil).