I don't watch 60 Minutes all that much, but this last Sunday, they interviewed the President of Brazil. Seems that the eoonomy of Brasil is booming, unlike that of the USA. He was ticking off all the areas in his economy where Brasil was ahead of the USA. There were quite a few. He said that his biggest customer was China, not the USA. Brasil has a positive balance of trade with China, where as, we have a negitive balance. The President said that Brasil had full employment and were actually had a shortage of "Engineers". How strange is that? The number of engineers who graduate from our colleges has actually gone down since 1986. It is actually worse than that, since we had fewer engineers moving into the USA before 1986 and more moving out. Even though we started graduating fewer engineers in 1986, we had fewer engineers moving into the work force prior to 1986. I also know for a fact that many new engineers did not go into engineering. They went into all kinds of other non-engineering jobs. I know some who went into Law and Medicine while others went to work on Wall Street. As you can see, since the USA does not make anything anymore, there is less need for engineers here.
I alway thought that to earn money and get rich that you had to produce something. I guess that I was wrong. I have a lot of friends who made millions "flipping" real estate. We all know that "flipping" real estate is, at best, a zero sum game much like poker. The gambling table does not produce any new money, it only rearranges the money around the table. The game ends when one person holds all the money and there is no way to restart the game except to find new players who have money that has been produced in the normal way, work. This sounds a lot like the game Madoff was playing and for which he went to jail. I forgot, the reason that "flipping" real estate could go on for so long and no one went to jail was that the money all came from the Government. When they ran out, they just printed more and the game went on.
If when you first heard the word, "flipping" and you did not see what was coming down the road, you have to admit that you had your eyes closed. What about the "Dot.Com" bubble? Did you really think that some 19 year old kid who had just learned how to program a computer and was a graduate from a public school system that ranked 25th out of 30 in math was going to, some how, sell more product than Sears? If you did, you were smoking something. As I have pointed out in past Blogs, it is not just the money that we have wasted on screw ball investments like the Dot.Com, but it is the missed opportunities. Most of our competitors did not go off searching for the quick buck and are now in a much better position economically. Right next door in Canada, they did not have to bail out their banks. The reason was that they did not make the crazy real estate loans that we did. They did not have a government loan office like FHA or the other alphabet soup agencies that we did. Us tax payers guarranted the loans that our banks and loan companies originated. The risk was ours and the profits went to the banks and others who origninated the loans. As I have said before, we had a feeding frenzy in real estate that was based on government money. The only thing that I can say is that we are stupid. I guess I must be an odd ball, because I have not made a home mortgage payment in over 30 years. I have never been under water on a home, but I have been under water on several cars, so why is that not just as bad?
Back to the engineer shortage in Brasil. Watch what happens in our school system with respect to science, math and engineers and you will be able to see if we are either going further down, or starting to go back up. When will things get back to "normal"? Normal, just might be the period from 1930 to 1940, who is to say that these past 50 years were "normal"?
