MCT Foresaw The Financial Crisis
We published an article in November, 2006: “Sprawling Factory Built In Oregon, But No One Knows What They Make, Including The Workers — Stock is way up!” We wrote about a factory that produced nothing but the company finances and business plan looked good to investors–so the stock was going up. Sound familiar? It could have been altd, “If The Manufacturing Sector Was Run Like the Financial Sector.”
Investment banks and Wall Street financiers created “wealth” and profits out of nothing. For example, they engineered derivatives— complex bets that were essentially making money off of money. This is different than investing capital based on savings from real work and production. So the house of cards has collapsed. If you are confused about what is going on imagine it is still 2006 or 2007. Here is reprint of our November 2006 article about a factory that is run like the financial industry was. Maybe now it will make sense. Maybe not.
Sprawling Factory Built In Oregon, But No One Knows What They Make, Including The Workers — Stock is way up!
A new start up company, The Acme Techno Widget Corporation, has built a big factory and warehouse in Hoboken, Oregon. Nearly a thousand people have gotten good paying jobs and local civic leaders as well as the workers are beaming. “In an era when most manufacturing jobs have been shipped overseas we welcome this new factory,” said AFL-CIO representative Chesnut Buguildifrut.
Hoboken Mayor Jelbert McStunkoil stated that, “The Acme Techno Widgit Corporation is setting a great example for American companies. This fantastic company is putting Americans back to work in the manufacturing sector and revitalizing American industry.”
But there is something very peculiar about this factory. No one can really say for sure what they are producing–including that people that work there.
“It is really a mystery as to what we are doing in there,” said worker Elvid Mansood. “But the management is well organized and the pay checks come through, so I can’t complain.”
We talked with Rupert Herfiscold as he walked out of the factory gate from his job as a day shift foreman. We asked him what he did in the factory all day. “We moved around empty boxes to make way for possible future merchandise. Then we prepped several loading zones and staging areas for possible utilization.”
We asked Acme Techno Widget spokesman Elford Istonbull if the company is planning on manufacturing any products in the future. “For now we are being productive with our present product which is preparing for a possible product manufacturing engagement. Our core products are quite profitable in the current market environment and we do not foresee further product expansion in the foreseeable future. We are more interested in expanding production of our current product line.”
“And what is exactly is your current product line?” We asked.
“We are primarily involved in expanding our product line expansion preparation as a main product. So while we are keeping to one product it is a product that has big potential growth possibilities.”
Huh? Acme Techno Widget Corporation President Ivorod McDuugerstien summed it up somewhat clearer to us, “We are a revolutionary new business model. We, in the United States, have gone from an industrial economy to a service economy and now we are becoming a financial economy. If you look at the core holdings of most mutual funds you will see that they are heavily invested in banking and finances. It doesn’t mater that a factory produces nothing as long as the financial and economic basis of the company is sound. Our company’s core structure is sound and that attracts venture capitalists and investors.
“While most manufacturing has been shifted to lower labor costing developing countries, a company that is really not manufacturing anything nor providing a service really can get an advantage from setting up shop in the US. Since the workers are not really doing much a minimum or bare bones domestic workforce can even out-compete the low wage Chinese workers. Investors and the American public really love local industry and despise outsourcing. Americans have always appreciated manufacturers who employ American workers and we are doing just that. And not only do we employ workers in America we vow to never ship our jobs overseas. What good would it do anyway to set up a factory in China just to produce nothing? And then we would have to pay for the extra shipping costs to ship our product back to America. Since we have no product the shipping costs would be wasted. But producing nothing in America at least provides American jobs and produces good will. That attracts investors which increases our stock. So this gains the company good publicity in the markets and with the American public. It’s a win-win situation for everyone. Another positive with our company is that we are in compliance with all pollution laws. We are probably the only American manufacturer who is not dependent on foreign oil and we produce absolutely zero global warming gases.”
“But how can you continue to pay the workers in this plant if you produce nothing?”
The CEO shook his finger at me and said, “I want to take issue with you journalists and all of these economists who think we are producing, ‘nothing.’ We’re gainfully employing hundreds of people in this factory with meaningful work and living wages. In an era when so many companies have shifted their manufacturing overseas our company is taking stock in the American worker. We have faith in the workers in this country! And we think with the ingenuity and the hard working spirit of American workers we can out produce anyone in the world. So what if our product is not exactly tangible. The sweat of the workers like ours, toiling day after day, in all kinds of weather, in this factory is what makes this country great—and I would not call that nothing!"