More Plant Shutdowns

[Pete Masterson]

Ron,

I have the same year coach as you ... and believe me, a "top off" of over $1000 is not something I really anticipated when I got my coach. And, I'm well aware of the fuel use, especially if you get a little too enthusiastic about covering ground in states with high speed limits and little traffic.

While your concern about the competition of China and India for oil certainly suggest that higher oil prices can be expected are true -- (that probably accounts for a good portion of the _other_ half of the price increase over the past year) a strengthening dollar, should it eventually arrive, will give the economy room to adjust to the higher prices -- as it has in the prior "oil shocks."

The gloom and doom news from the media over our economic situation often ignores a few realities. For example, the 2007 GDP for China is only about 1/4 this size of the US economy. (India's GDP is about 1/2 the size of China's economy.) 07 wasn't a great growth year for the US (about 2.2%) and China reported a 10+% increase. However, when converted to actual dollars, the US growth was about $305 billion while China's GDP grew about $350 billion. When you compare percents (2.2 vs 10+) it looks bad for the US ... but when you look at the actual dollars it represents, the massive size of the US economy is still quite large in comparison. Indeed, in a good year when the US growth rate gets to 3.5% or so, our _growth_ alone is equal to 1/2 the total GDP of China.

Yes, China (and India) are gaining on us. Yes, we have many challenges ahead. Yes, there are several disturbing trends in our economy and demographics that suggest that some serious challenges will occur in the next few years. But there is considerable strength in our economy and there are also many factors that suggest that we'll do better than many doomsayers claim.

No ... we won't be selling hamburgers to the world. It's actually better for our economy (and the world's economy) that production move to places where it can be most efficiently produced. (It leaves our economy to produce the goods and _services_ that we're most efficient at doing.) That the US loses "high paying" manufacturing jobs is sometimes painfully obvious -- but manufacturing is less than 20% of our GDP (2006 figures latest available to me). When manufacturing moves overseas, it generally increases other jobs in the U.S. -- this, of course, is dispersed, so the obvious (newsworthy) loss of jobs is publicized but the not-so-obvious increase in other jobs, spread throughout the country and in a variety of sectors (transportation, wholesale trade, retail trade, finance, etc.) is neither obvious nor reported.

Indeed, this map gives a little perspective as it relates the GDP of each US _state_ to countries throughout the world. 

<http://strangemaps.wordpress.com/2007/06...ilar-gdps/> (you may need to reassemble this to load in your browser) or try

<http://tiny.cc/vXWbp>

The US generates about 30.5% of the world GDP, China contributes about 5.8% of world GDP.

<http://www.swivel.com/data_sets/show/1004018>

So, short term, I'm quite concerned about the US economy. I'm painfully aware of the recent, significant run-up in fuel cost. But longer-term, I'm quite confident that we'll recover economically. So don't get sucked in by the reportage from the media over our economic "problems" (and realize that in a presidential election year there are many who benefit from "bad news" about the economy). 

Pete Masterson

'95 Blue Bird Wanderlodge WBDA 42

El Sobrante CA

"aeonix1@mac.com"

On Apr 19, 2008, at 1:02 PM, Ron Thompson wrote:

Pete,

I agree with you that our economy will weather this storm, however, we are in a completely different situation this time.  China, India, and Asia were not the power houses they are becoming and we had not given away so much of our manufacturing base.  Those overseas companies are not going to give up what they now have at all.  Their competetion at the Oil Companies market place is going to ensure that we are going to have high prices from now on.

With our manufacturing base gone, what will we have left to sell, hamburgers?

I know that diesel prices are certainly going to curb my travel.  I have a 2005 Dodge Ram 2500 Cummins diesel and it cost me over a hundred dollars just to fill its tank.  At $4.14 per gallon of diesel, it costs me $1242.00 to fill this 1995 WLWB 42 footer.  And at 6 miles to the gallon if I baby it along I can get down the road about 1800 miles.  However, if I am in mountains or just hills that mileage goes down quickly to about 4 miles to the gallon.

Heartbreaking....

Ron Thompson

<snip>