Kiss Your IT Sector GoodBye
We've been led to believe that ours is becoming a service economy and that education and high technology is the future. But, that's not the whole story . . .
The residual effects of sweeping cost cuts helped boost IBM's first-quarter earnings by 22 percent . . . despite minor revenue growth.Sound familiar?
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[IBM's CEO] praised the results and said they reflected "the benefits of the strategic actions we've taken in recent years to reposition the company."
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With increased competition from less-expensive providers around the world, IBM's services growth has been sluggish in recent quarters.
Profit gains have been achieved largely through expense cuts and shifts in labor from costlier markets such as Europe to places like India.
[Russo] aims to save $1.7 billion after three years . . . [by eliminating] 10 percent of the combined staff, or 8,800 jobs, after reducing the workforce by 50 percent at Murray Hill, New Jersey-based Lucent.Expect much more of the same until the only jobs left in America pay minimum wage, if that.
So, yes ours is becoming a service economy, but a third world one - where the benefits of technology inure to the rich, while the lower class is exists to serve them - literally.
posted by qrswave @ Tuesday, April 18, 2006
11 Comments:
http://www.washingtonpost.com/wp-dyn/articles/A33869-2005Jan24.html
IBM is owned by the Chinese company, Lenovo. It's not even an American company, anymore.
I been wrestling with notions lately, immigration/assimulation, culture, yada, yada. What I'm wondering is who will be the Indian, or Chinaman, or Mexican to stand up and do what my grandfather did in the struggle to unionize back in the 30's? Will there be the same revolution in work place safty and hours/wages? If there isn't, how will globalization work without the complete downfall of America? We will all be surfs again! Somethings got to give.
Miss R, IBM sold only its PC business. "some experts predicted yesterday that in the end Washington will allow the IBM-Lenovo deal to go ahead because the business being sold is a relatively low-tech operation. IBM has long hinted that it wants to get out of the low-margin "commodity" business of making PCs in favor of pursuing its much more lucrative corporate and government consulting contracts."
Fred, You're absolutely right. America's downfall must come first. And it has. American industry has been decimated. What remains is only vestige of the past. The glory is all in our minds.
The good news is, revolutions are born from ideas.
America does not need to collapse in order to recover. There are systems in place to allow for improvement. I am not the pessimist QRS is.
I am not a "pessimist." I am a realist.
American industry (as in machine/tool capacity) is a shadow of what it once was - only the auto and aerospace sectors remain.
That doesn't mean it can't be rebuilt under the right financial system.
But you just said the entire system has to collapse in order to rebuild anything...
But, I also said that I considered it done. It depends on how you define "collapsed."
Well, I don't think America is collapsed at the moment. On the brink of total devastation, but not collapsed.
I define "collapsed" to be when the foreign powers that hold our T-bills demand a return on their investment, and we hand them dust in return. Unless something is changed, that day is coming soon enough...when we run out of credit and have to pay the bill.
Should be very interesting times ahead, and very frightening ones for those who aren't prepared. Collapse to me means that American no longer have the ability to cover basic necessities to keep themselves fed and sheltered. That's the scenario under stagflation, where costs of basic necessities rise and wages fall or disappear. My suggestion for surviving this is to get on some land and learn some permaculture, learn to be self sufficient. There are resources on the net to start the learning processes. The problem in the US is that land is considered capital and easy to foreclose on, seize and expropriate in high interest rate and high tax environment. So even this option could be closed to Americans and their families unless they are capable of launching a full scale revolution.
QRS - I think you forgot the weapons manufacturers.
Anon 1, thanks. You're right - local economies is the only solution, but mortgage contracts will be a colossal obstacle, though not impossible to negotiate. A lot must be forgiven, but some loans will have to be paid - without interest, of course.
Anon 2, thanks. I was considering them as included in aerospace. But, you're right. They extend much further than that.
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