WHY THE U.S. WILL NOT SEE THE LIGHT

Andrew S. Grove, the son of a Hungarian middle-class Jewish family, was born in Budapest, Hungary on September 2, 1936. His Hungarian name was Andras Grof.

Andrew Grove

It was the beginning of the Second World War. First the Nazis came marching in and Andras was hidden from them. Then, in 1957, the Russians came marching in and with another young Jew he escaped through Austria and landed in New York penniless.

In his high school he was exceedingly good in Chemistry. Since Grove (Americanized name) had Jewish relatives and the Jews have an international program of educational aid, he was sent to University and graduated with a degree in Chemical Engineering.

Italians do not have an international aid program for their youth. Being a proud Sardinian, I joined the U.S. Marine Corps which entitled me to four years of government payments for college. These payments allowed me to go and study in Mexico.

Being poor can be an excellent builder of character and, frequently, allows you to travel.

In the following interview with BUSINESS WEEK, I will quote Andrew Grove directly and add my comments. I want the reader to understand that this is an intelligent man who understands the reality of the present Great Depression, but cannot express himself completely because of the political consequences. Remember, he still is a former refugee!

For the student of ideas, Lying about reality is definitely harmful to everyone.

ANDY GROVE: HOW AMERICA CAN CREATE JOBS (Business Week, 1st of July 2010)

The former Intel chief says “job-centric” leadership and incentives are needed to expand U.S. domestic employment again

(Why “Andy”? Is Business Week trying to show how equal we all are?)

By Andrew Grove

Americans love the idea of the guys in the garage inventing something that changes the world. New York Times His argument: Let tired old companies that do commodity manufacturing die if they have to. If Washington really wants to create jobs, he wrote, it should back startups. columnist Thomas L. Friedman recently encapsulated this view in a piece called “Start-Ups, Not Bailouts.”

Friedman is wrong. Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.

Dr. Pinna says:

Grove is right. The idea that private business can create jobs in a few years is total fantasy. It takes, factories, capital and a long uphill haul to create thousands of jobs.

COMPUTER MANUFACTURING

Today, manufacturing employment in the U.S. computer industry is about 166,000, lower than it was before the first PC, the MITS Altair 2800, was assembled in 1975.

Andy Grove

Dr. Pinna says:

Look at the time lines. It takes years to build factories and an economic infra-structure. American jobs are not going to drop down out of Heaven in a few months.

Andrew Grove continues:

Meanwhile, a very effective computer manufacturing industry has emerged in Asia, employing about 1.5 million workers – factory employees, engineers, and managers. The largest of these companies is Hon Hai Precision Industry, also known as Foxconn. The company has grown at an astounding rate, first in Taiwan and later in China. Its revenues last year were $62 billion, larger than Apple (AAPL), Microsoft (MSFT), Dell (DELL), or Intel. Foxconn employs over 800,000 people, more than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard (HPQ), Intel, and Sony (SNE) (figure C).

Some 250,000 Foxconn employees in southern China produce Apple’s products. Apple, meanwhile, has about 25,000 employees in the U.S. That means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods, and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology (STX), and other U.S. tech companies.

The idea that as long as “knowledge work” stays in the U.S., it doesn’t matter what happens to factory jobs. It’s not just newspaper commentators who spread this idea. Consider this passage by Princeton University economist Alan S. Blinder: “The TV manufacturing industry really started here, and at one point employed many workers. But as TV sets became ‘just a commodity,’ their production moved offshore to locations with much lower wages. And nowadays the number of television sets manufactured in the U.S. is zero. A failure? No, a success.”

Andy Grove

Andrew Grove’s reply:

I disagree. Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution.

Dr. Pinna says:

Right on!

There is an old American and European dream that says:

We do the complicated work that requires education and machines. That is why we get paid such high wages. The Asians, Africans and South Americans do the simple work, and that is why they get such cheap wages.

This dream ended forty years ago. Today we are in a “Global Market” and all workers are beginning to get the same pay, whoever and wherever they are. Within a few years Americans and Chinese and European workers will earn the same pay per hour.

There is no such thing as a “monopoly of quality work.”

Money will flow to those countries that produce commodities wanted by consumers anywhere on the planet. This will be painful to American and European workers and pleasurable to all the other workers.

People say they want “Equality.” Now, as they get “Equality” and find their lifestyle going down instead of up, they are confused and angry. Americans and Europeans were trained by their rich masters and their governments that “Equality” meant “Equally Rich” not “Equally Poor.”

Andrew Grove continues:

Wanted: Job-Centric Economics

Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best of all economic systems — the freer the better.

Dr. Pinna says:

Remember this statement. It is Andrew Grove’s first big mistake. I believe he is lying when he says this.

Our generation has seen the decisive victory of free-market principles over planned economies. So we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.

Something either is or it is not. This is fundamental logic. An economy is either free or not free and if not free, it is controlled by a small group of people who benefit from this control.

Andrew Grove continues:

Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal.

Dr. Pinna says:

The American Government and the European Governments are unlike the Communist Governments of China and Vietnam.

Western Governments are slaves of the Gigantic Trans-National Corporations. Western Governments are directed by the same directors and producers that run Hollywood.

Their modus-operandi is identical.

The directors and producers chose STARS AND THEIR FAMILIES, to run their governments.

EXAMPLE: The CLINTON FAMILY. The ex-president and his wife are seen daily, floating around the world, and telling foreign leaders what they should do.

The Clinton family

Here is a Google search from 7/5/2020 at 11.22AM:

1. News for clintons news

Clinton vows support to Georgia, pushes for Russian troop withdrawal – By Mary Beth Sheridan, Georgia– Secretary of State Hillary Rodham Clinton on Monday reassured Georgia that the Obama administration would continue Washington Post342 related articles»

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Chelsea Clinton’s Wedding: 10 Things We Hope HappenBill Clinton busts out his saxophone and wows the crowd with some rocking tunes. Hillary Clinton wears something other than a pantsuit. The Frisky455 related articles»

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Bill Clinton recalls Byrd warmlyWashington Post (blog)

The Hollywood directors never change their style. They know that the majority of the world’s population believes in Fairy Tales and that the people of the world like to hear and see their beloved characters over and over, so they feed the world what the world will gladly eat: Sugar Coated Characters, who smile endlessly and never say three words that the most stupid person cannot understand.

These directors are hired by the Giant Transnational Corporations, just as they hire politicians, lobbyists and every form of government worker in every country in the world.

It is simply part of the cost of doing business.

Most intelligent world observers age completely aware of this. That is why it is a waste of time to complain about the bad acting of Obama or Merckel or Sarkozy.

Since the governments of the world, with the exception of the few Communist governments, are completely controlled, how can we possibly think that the Western governments will change and help renew an economy that has not only collapsed, but changed its fundamental character?

ANDREW GROVE’S ADVICE

How do we turn such Asian experience into intelligent action here and now? Long term, we need a job-centric economic theory – and job-centric political leadership – to guide our plans and actions. In the meantime, consider some basic thoughts from a onetime factory guy.

The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshore labor. (If the result is a trade war, treat it like other wars – fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations.

Dr. Pinna says:

Gosh, Andrew, what a joke! Nowhere in Earth or Heaven can you keep politicians away from money.

Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability – and stability – we may have taken for granted.

You are now witnessing an erudite, educated, experienced business man giving in and collapsing before the reality of the pressure of infinite money squashing his brain.

Too bad.

CONCLUSION

Andrew Grove’s article is available everywhere on the internet.

Almost everything he says is true, and it is very enlightening because it offers numbers and details of the cost of creating and maintaining jobs.

His article clearly indicates why China is going directly up and the West is going directly down in terms of manufacturing and in terms of job creation.

Andrew Grove knows that it is utterly impossible to turn these immeasurable economies around, but like all directors out of Hollywood, he produces the unexpected ending that results in the usual Happy Ending. An ending that Americans have been seeing and enjoying for the last century.

As a former Jewish Refugee who achieved fame and success in the Land of Make Believe, Andrew Grove is not about to rock the boat. However, it is my sorry plight as a doctor who has to report the facts, whatever they might be, to say:

Sorry. No. I really don’t see it the way that Dr. Grove does!

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