Industrial Insight

Our recent over capacity depressed profits. | May 12, 2010

I agree that we installed too much capacity but we have liquidated much of the large capital equipment and will need to recapitalize thw worlds production.

http://www.tnr.com/article/politics/the-case-economic-doom-and-gloom

The Case for Economic Doom and Gloom

Why we’re not out of trouble yet–not even close.
John B. Judis

“Brenner traces this problem of global overcapacity to the early 1970s when the countries decimated by World War II had rebuilt their industrial base and were capable of competing equally with the United States, and when newly industrializing countries in Asia and Latin America were beginning their ascent. At that point, global overcapacity manifested itself in declining rates of profit. In the United States, for instance, average profit rates in manufacturing fell from 24.5 percent in the 1960s to 13.4 percent in the 1970s and 11.8 percent in the 1980s. As profit rates declined, firms were less inclined to invest and expand, leading to a decline in overall growth in the economy and to higher average unemployment over a decade.”

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I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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