Higgenbotham's Dark Age Hovel

[Higgenbotham]

World per capita energy use has been stagnant for several years. If the developed economies were getting huge gains in efficiency to offset the decline in their per capita energy use, that would be one thing but they aren't. Instead, the FIRE economy is filling in the gaps to keep GDP floating higher. Given the longstanding nature of the decline in per capita energy use in the developed economies against the rise of Asia, I don't think it will be possible to reverse this trend completely and "Make America Great Again." Though I do think it would be possible to at least slow the trend.

https://www.youtube.com/watch?v=OFrxgMFbN8c

The transcript of the first 15 minutes of this video is copied below. The parts that seem to best correspond to the above are underlined.

It's pretty much true, though, that any position can be corroborated online if someone looks hard enough. I just happened on it, though, because someone linked to it in a blog I regularly read.

welcome my name is Glenn dies and I'm joined by Alexander mccurtis and Professor Michael Hudson and uh yeah welcome to the both of you and today uh yeah we I really wanted to discuss the decoupling or fragmentation of the international economy and also now the alternative economic architecture emerging I would say primarily in the East but also in other parts of the world so I thought we can start off by yeah discussing the defining economic challenges of our time uh for those of us who were studying economics in the '90s and 2000s uh the big talk was always economic interdependence this was supposed to be the recipe for prosperity and peace uh but these days the rhetoric obviously has changed now uh the main talk in town will be the yeah the a new international division of power so while in the early 2000 the idea was you know the United States would invent the iPhone and the Chinese could assemble it this was the distribution of labor but now of course China has climbed up this Global value chains and it can effectively do both uh the invention of it and the assembly meanwhile Biden recently argued that if something is invented in the US it should also be produced there so it's a dismantling or repatriation of the supply chains going on and uh we also see economic dependence being weaponized I would say uh hijacking of Iranian uh oil tankers uh seizing the Russian Central Bank assets or simply trying to cut off or yeah China's access to technology so I guess my my first question would what does all of this mean this what what are the main Trends and what does it mean not just for the United States and China but also the wider World well countries such as Germany which was very much tied into this uh very liberal economic system be crushed under the new political economy or what uh what what do you see coming the United States was always for free trade after World War II as long as it was the most efficient and strongest industrial producer but uh now that it's not the strongest anymore it's gone back to the protectionism uh that in the 19th century built up its uh uh industry uh to begin with uh the problem is at this time even though the United States and other countries uh are going protectionist uh the United States can't reindustrialize like it could then because it's already uh overloaded its economy uh with financialization uh corporate debt personal debt uh and uh privatized Medical Care privatized education the the economic overhead of getting a job here and the uh the pay that workers have to get uh not simply uh to eat and uh get clothed but for medical insurance for Debt Service uh is prices America out of the market so it really has no alternative but to be uh uh autarchic but it can't be aaric because it's it nobody can see how it can reindustrialize so there's a kind of uh rage going on here among economists and just today the treasury secretary Janet yelen uh is going to China and said well we can't uh uh import uh uh the the the anti the solar uh panels
anymore because China's government supports them as if the US government also doesn't support them and other countries don't support them it's a you're you're getting a travesty almost of the public statements of why uh America has to uh avoid imports from China impos sanctions on Russia uh but the the result is there are going to be shortages uh all throughout economies that are following this withdrawal from uh international trade that it's very that is very interesting when you said that there's going to be shortages um will these s shortages eventually become self-correcting because I I was reading actually again there's been a very interesting in statement by the governor of the Russian Central Bank nabul who um is by the way somebody who I think personally emotionally was very wedded to the neoliberal open market unregulated economic model she's absolutely astonished at what the effect the actual effect of the push to kind of enforced protectionism in Russia has been and in this statement she says that what's actually happening and she says I can't explain it this is astonishing to me is that investment is rising consumer spending is rising wages are rising and in conditions of an inv investment boom production is expanding she says you know I don't quite believe this I worry that the economy a Russian economy is growing faster than capacity that it's going to burn itself out in some way I mean it's it's a very strange statement both confidence in some respects panicky in others this can't be true I mean but is that actually what is going to happen because um this system of everybody link being linked up in a single economic system actually has been I think a relatively recent thing in terms of you know post British Empire time um will in fact the fragmentation actually in the end lead to a more diverse economic landscape and a more balanced one I'm just just wondering because nebulin is now perhaps I think starting to her own astonishment wonder whether that might happen in Russia itself well economists love to use the word self-correcting because if economies are self-correcting you don't need a government you can just have the private sector running the economy and in practice that means Wall Street but there's no way that the American economy can be self-correcting uh with without a few Decades of uh new investment you'd have to reinvent the educational system you would have to take uh public Health into he uh healthare into the public domain so that you could lower the cost of living so that employers wouldn't have to pay such high wages uh you'd have to provide uh Freer education so that workers don't uh graduate uh into the labor force with so much debt uh that they uh need high enough wages to pay the debt uh and even so can't afford to buy houses the the America and also I think uh Western Europe has painted itself into a corner that is now systemic the whole trend from 1945 to today uh all all of these uh uh uh these 70 uh years have uh built up uh such rigidities uh that there's no way that you can break them down and the idea that somehow there's a government policy that can fix things won't work either unless it's so radical a policy uh that it be the current economy anymore and nobody's talking about the need for structural change they just uh uh avoid talking about the debt problem uh talking about uh what makes America high cost and then of course there's the war spending well you you mentioned um uh the the rent seeking as something that makes America very uncompetitive obviously extracting having all this uh well not necessarily oligarchs but people extracting money through um yeah through the way the economy has been financialized intellectual property uh land rights Technologies this obviously is a burden for the productivity and competitiveness of the United States but but there's also a sense of a um rent seeking internationally uh through this monopolistic positions so again when you have a monopoly in certain areas uh obviously this has economic influence well Economic Consequences in terms of the high Prof profitability but you also have the the ability to extract political influence when there's a position of economic Monopoly uh but I but uh um yeah because I remember back in 2009 I think the Putin called the the the dollar um they call it a leech or something along those lines which was also uh suggesting that there was a similar uh way of uh extracting wealth so in other words the rent seeking not just in America but for the entire International Community and I was wondering if this goes into what Alexander was mentioning because uh for for countries around the world well then especially countries who have Alternatives uh uh be it Russia if they're not through intellectual property rights or American Tech platforms or debt Banks the use of the US dollar uh if if they don't use all of this would it be would it result in less efficiency or or would it be essentially say saving themselves or Liber liberating themselves from uh rent seeking from the United States would this have anything to do with it you think you put your finger on it the O official US position it recognized that it can't be uh an industrial exporter anymore though though how is it going to balance the international payments to support the Dollar's exchange rate the solution is rent seeking that's why the United States says well what's the main new rent seeking uh opportunity in World Trade well it's information technology and computer technology that's why the United States is uh fighting China and uh so much and why president Biden has said again and again that China is the number one enemy uh it's trying uh it moved first against Huawei uh for the 5G uh uh Communications and now it's trying to get uh Europe and American uh and Taiwanese exporters not to export uh uh computer chip to China not for the Dutch to export uh uh chip engraving Machinery to China the there's a belief that somehow the United States can if it can prevent other countries from producing high technology inter uh intellectual property rents uh then uh other countries will be dependent and rent seeking really means dependency of other countries that they don't have a choice to pay uh you much uh more uh money than the actual cost of reduction that's uh rent price overv value well uh the United States uh since it can't uh uh compete on value because of the high cost of of living and labor here it can only monopolize rent well China has uh not been deterred uh China's a lead frog over the United States and is producing its own etching Machinery its own uh computer chips and uh uh the question is what is rest of the world going to do well uh the rest of the world means on the one hand the global majority Eurasia the the bricks plus and on the other hand Western Europe Western Europe has bought right in the middle of all this is it really going to foro the uh much less expensive uh Chinese uh exports at Cost uh and including normal profit or is it going to be uh uh let itself be locked in to American rent extracting technology not only for computer chips but for Military Arms uh I know that France SWS to use uh uh the fighting uh in uh uh against Russia uh in Ukraine is an opportunity to say well let's build rebuild the European arms industry but uh the Germans are not particularly in favor of this and the Americans uh certainly said no no when we say you have to spend uh two to three% of your GDP in arms that means by American Arms integrated Army so it's all about rent seeking it's also presumably the reason why we have never succeeded in creating our own uh um social media type infrastructure in Europe we have no European equivalence to Google or TikTok which we're hearing so much about the Chinese Tik Tok or Facebook or anything like that we entirely rely upon the Americans to provide these things for us and whenever there's any attempt to produce anything like that in Europe it it always fails partly because the Americans object to it now I I mean I know all about this because uh my brother I should say worked for a time at the European Parliament and he saw the American lobbying systems that operated within the European Parliament and the European levels in action and extremely effective they were but this isn't a mechanism for economic for technological progress at least this is how it looks to me it's a formula for ultimate stagnation because you're locked in to a system which isn't even as far as I could see focused on development it's focused on rent which is which is which is a completely different thing so um you mentioned that the Chinese you know you use the word leap...

Some long term themes:

Giant sucking sound of the US dollar system
US economy is too inefficient
The cost structure of the US is too high
Utilities such as education, health care and financial services that should be used to support productive parts of the economy have been turned into extractive businesses and have become most of the economy itself

[Guest]

https://www.youtube.com/watch?v=OFrxgMFbN8c

The transcript of the first 15 minutes of this video is copied below.

Some long term themes:

Giant sucking sound of the US dollar system
US economy is too inefficient
The cost structure of the US is too high
Utilities such as education, health care and financial services that should be used to support productive parts of the economy have been turned into extractive businesses and have become most of the economy itself

I listened to the whole show. They are all pro-Russian and Pro-Chinese shills. They blame America for "starting" a new cold war with Russia and China and place all of the blame on America.

Michael Hudson said that Ukraine started the war by attacking Russian speakers in the Donbas...un, yeah, right...

The only way that Europe can be "independent" is to become dependent on Russia and China....

This is the road to to slavery. These "experts" are ridiculous.

I'll stay on the American/Japanese/Western European side of the cold war.

[Higgenbotham]

https://www.youtube.com/watch?v=OFrxgMFbN8c

The transcript of the first 15 minutes of this video is copied below.

Some long term themes:

Giant sucking sound of the US dollar system
US economy is too inefficient
The cost structure of the US is too high
Utilities such as education, health care and financial services that should be used to support productive parts of the economy have been turned into extractive businesses and have become most of the economy itself

I listened to the whole show. They are all pro-Russian and Pro-Chinese shills. They blame America for "starting" a new cold war with Russia and China and place all of the blame on America.

Michael Hudson said that Ukraine started the war by attacking Russian speakers in the Donbas...un, yeah, right...

The only way that Europe can be "independent" is to become dependent on Russia and China....

This is the road to to slavery. These "experts" are ridiculous.

I'll stay on the American/Japanese/Western European side of the cold war.

Problem is, if there is an opinion out there that tends to corroborate statements of the following type:

Nowadays things out on the periphery aren't very good due to the huge sucking sound coming from Washington. All of the resources are being sucked into the center of the system. Once Washington collapses and the vacuum is shut down, things will be pretty good out there, relatively speaking.

Once the giant sucking sound from printed US dollars is silenced forever, it will not be a slow decline for the US or the man on the street in the US.

probably the source is going to have an anti-American bias. Rarely do I see anybody who is neutral or pro-America express the opinion that mismanagement of the world reserve currency is a problem. Long back, my Congressman (now retired) did admit to me that this mismanagement would destroy supply chains (not his exact words). Which is one reason why I copied the entire first 15 minutes of the transcript and underlined the pieces that are in agreement, which I think those underlined parts are pretty objective. Their bias is scattered throughout the parts that aren't underlined too.

For example, he says, "The United States can't reindustrialize like it could..." He didn't say flat out, "The United States can't reindustrialize.", which would not be a true statement. But it is certainly true that the United States can't reindustrialize like it could and then he goes on to state the correct reasons for that. For those who are pro-America, that's a real problem, particularly for those who think the main event will be a new world war.

[Higgenbotham]

The basic reasons why Europeans became dominant were summed up in Jared Diamond’s book Guns Germs and Steel. With these, they were able to implement colonial imperialism and thus gain advantage over other cultures. It is not due to superior culture, religion or genes. (He also wrote a book called Collapse, which may be of interest to the occupants of a certain Hovel.).

It's been said that Jared Diamond is a polymath. If someone is a polymath and in demand, that's a difficult role in today's world. Perhaps it could be said that he's written a few too many books on too wide a range of subjects and fractured his time just a little too much.

For example, in the book, he made several references to the rich being able to insulate themselves from environmental contaminants by drinking bottled water. That was back in 2005, but he should have known better even then.

A further conflict of interest involving rational behavior arises when the
interests of the decision-making elite in power clash with the interests of the
rest of society. Especially if the elite can insulate themselves from the conse-
quences of their actions, they are likely to do things that profit themselves,
regardless of whether those actions hurt everybody else. Such clashes, fla-
grantly personified by the dictator Trujillo in the Dominican Republic and
the governing elite in Haiti, are becoming increasingly frequent in the mod-
ern U.S., where rich people tend to live within their gated compounds
(Plate 36) and to drink bottled water.

Another view that is widespread among affluent First World people, but
which they will rarely express openly, is that they themselves are managing
just fine at carrying on with their lifestyles despite all those environmental
problems, which really don't concern them because the problems fall
mainly on Third World people (though it is not politically correct to be so
blunt). Actually, the rich are not immune to environmental problems. CEOs
of big First World companies eat food, drink water, breathe air, and have (or
try to conceive) children, like the rest of us. While they can usually avoid
problems of water quality by drinking bottled water...

That acknowledged interdependence of all segments of Dutch society
contrasts with current trends in the United States, where wealthy people in-
creasingly seek to insulate themselves from the rest of society, aspire to cre-
ate their own separate virtual polders, use their own money to buy services
for themselves privately, and vote against taxes that would extend those
amenities as public services to everyone else. Those private amenities in-
clude living inside gated walled communities (Plate 36), relying on private
security guards rather than on the police, sending one's children to well-
funded private schools with small classes rather than to the underfunded
crowded public schools, purchasing private health insurance or medical
care, drinking bottled water...

He lists 12 environmental problems that contribute to collapse. The book is probably worth reading for that. His discussions of corruption and the 50 year timeline (from 2005) for environmental issues to become critical...without going into the details (some of which are scattered around in here), I don't agree.

[Higgenbotham]

It's been said that Jared Diamond is a polymath. If someone is a polymath and in demand, that's a difficult role in today's world.

The last days of the polymath – The Economist

Edward Carr | Autumn 2009

Mindful of that sort of promiscuity, I asked my colleagues to suggest living polymaths of the polygamous sort—doers, not dabblers. One test I imposed was breadth. A scientist who composes operas and writes novels is more of a polymath than a novelist who can turn out a play or a painter who can sculpt. For Djerassi, influence is essential too. “It means that your polymath activities have passed a certain quality control that is exerted within each field by the competition. If they accept you at their level, then I think you have reached that state rather than just dabbling.” They mentioned a score of names—Djerassi was prominent among them. Others included Jared Diamond, Noam Chomsky, Umberto Eco, Brian Eno, Michael Frayn and Oliver Sacks.

It is an impressive list, by anyone’s standards. You can find scientists, writers, actors, artists—the whole range of human creativity. Even so, what struck me most strongly was how poorly today’s polymaths compare with the polymaths of the past.

In the first half of 1802 a physician and scientist called Thomas Young gave a series of 50 lectures at London’s new Royal Institution, arranged into subjects like “Mechanics” and “Hydro­dynamics”. By the end, says Young’s biographer Andrew Robinson, he had pretty much laid out the sum of scientific knowledge. Robinson called his book “The Last Man Who Knew Everything”.

Young’s achievements are staggering. He smashed Newtonian orthodoxy by showing that light is a wave, not just a particle; he described how the eye can vary its focus; and he proposed the three-colour theory of vision. In materials science, engineers dealing with elasticity still talk about Young’s modulus; in linguistics, Young studied the grammar and voc­abulary of 400 or so languages and coined the term “Indo-European”; in Egyptology, Jean-François Champollion drew on his work to decode the Rosetta stone. Young even tinkered around with life insurance.

When Young was alive the world contained about a billion people. Few of them were literate and fewer still had the chance to experiment on the nature of light or to examine the Rosetta stone. Today the planet teems with 6.7 billion minds. Never have so many been taught to read and write and think, and then been free to choose what they would do with their lives. The electronic age has broken the shackles of knowledge. Never has it been easier to find something out, or to get someone to explain it to you.

Yet as human learning has flowered, the man or woman who does great things in many fields has become a rare species. Young was hardly Aristotle, but his capacity to do important work in such a range of fields startled his contemporaries and today seems quite bewildering. The dead cast a large shadow but, even allowing for that, the 21st century has no one to match Michelangelo, who was a poet as well as a sculptor, an architect and a painter. It has no Alexander von Humboldt, who towered over early-19th-century geography and science. And no Leibniz, who invented calculus at the same time as Newton and also wrote on technology, philosophy, biology, politics and just about everything else.

Although you may be able to think of a few living polymaths who rival the breadth of Young’s knowledge, not one of them beg­ins to rival the breadth of his achievements. Over the past 200 years the nature of intellectual endeavour has changed profoundly. The polymaths of old were one-brain universities. These days you count as a polymath if you excel at one thing and go on to write a decent book about another.

Young was just 29 when he gave his lectures at the Royal Institution. Back in the early 19th century you could grasp a field with a little reading and a ready wit. But the distinction between the dabbling and doing is more demanding these days, because breaking new ground is so much harder. There is so much further to trek through other researchers’ territory before you can find a patch of unploughed earth of your own.

Even the best scientists have to make that journey. Benjamin Jones, of the Kellogg School of Management near Chicago, looked at the careers of Nobel laureates. Slightly under half of them did their path-breaking work in their 30s, a smattering in their 20s—Einstein, at 26, was unusually precocious. Yet when the laureates of 1998 did their seminal research, they were typically six years older than the laureates of 1873 had been. It was the same with great inventors.

Once you have reached the vanguard, you have to work harder to stay there, especially in the sciences. So many scientists are publishing research in each specialism that merely to keep up with the reading is a full-time job. “The frontier of knowledge is getting longer,” says Professor Martin Rees, the president of the Royal Society, where Young was a leading light for over three decades. “It is impossible now for anyone to focus on more than one part at a time.”

Specialisation is hard on polymaths. Every moment devoted to one area is a moment less to give over to something else. Researchers are focused on narrower areas of work. In the sciences this means that you often need to put together a team to do anything useful. Most scientific papers have more than one author; papers in some disciplines have 20 or 30. Only a fool sets out to cure cancer, Rees says. You need to concentrate on some detail—while remembering the big question you are ultimately trying to answer. “These days”, he says, “no scientist makes a unique contribution.”

It is not only the explosion of knowledge that puts polymaths at a disadvantage, but also the vast increase in the number of specialists and experts in every field. This is because the learning that creates would-be polymaths creates monomaths too and in overwhelming numbers. If you have a multitude who give their lives to a specialism, their combined knowledge will drown out even a gifted generalist. And while the polymath tries to take possession of a second expertise in some distant discipline, his or her first expertise is being colonised by someone else.

The monomaths do not only swarm over a specialism, they also play dirty. In each new area that Posner picks—policy or science—the experts start to erect barricades. “Even in relatively soft fields, specialists tend to develop a specialised vocabulary which creates barriers to entry,” Posner says with his economic hat pulled down over his head. “Specialists want to fend off the generalists. They may also want to convince themselves that what they are doing is really very difficult and challenging. One of the ways they do that is to develop what they regard a rigorous methodology—often mathematical.

“The specialist will always be able to nail the generalists by pointing out that they don’t use the vocabulary quite right and they make mistakes that an insider would never make. It’s a defence mechanism. They don’t like people invading their turf, especially outsiders criticising insiders. So if I make mistakes about this economic situation, it doesn’t really bother me tremendously. It’s not my field. I can make mistakes. On the other hand for me to be criticising someone whose whole career is committed to a particular outlook and method and so on, that is very painful.”

For a polymath, the charge of dabbling never lies far below the surface. “With the amount of information that’s around, if you really want to understand your topic thoroughly then, yes, you have to specialise,” says Chris Leek, the chairman of British Mensa, a club for people who score well on IQ tests. “And if you want to speak with authority, then it’s important to be seen to specialise.”

That is why modern institutions tend to exclude polymaths, he says. “It’s very hard to show yourself as a polymath in the current academic climate. If you’ve got someone interested in going across departments, spending part of the time in physics and part of the time elsewhere, their colleagues are going to kick them out. They’re not contributing fully to any single department. OK, every so often you’re going to get a huge benefit, but from day to day, where the universities are making appointments, they want the focus in one field.”

https://the-polymath.com/the-last-days- ... economist/

[Higgenbotham]

As a successful physics professor at a top institution in academia, Tom Murphy broke ranks in one of the hardest possible ways at the peak of his career.

One reason this is so difficult, and it came to mind when writing this, is he knows he can only credibly discuss collapse in physics terms to certain audiences, his social group in particular. If, for example, he tries to discuss it in economic terms his colleagues and many others are going to think, "What does Tom really know about economics? He should just stick to physics." That makes a holistic discussion about collapse difficult and unlikely to be tackled or discussed much in today's environment.

[aeden]

Encirclement doesn’t require kinetic. The structural inflation is the feature produced.
They will not comprehend building inside out as many of the supply chains are moving anyways to just survive the current polo-tics.
Looting derivatives is all they are now up as quality can be noted as slow at first then all at once as
capital will vanish and move. The ratio of 17 to 1 scaling will increase to Mexico as Ford was adulterated on levels ignored also.

The warnings are unheeded.

For the few we watched the oxygen deprivation zones in the carbon sink you call the Oceans and the effects of Quality ignored
later to the project as they exported concentrated levels of contaminants labeled organic.
Locally they devastated the soil with the pollutants as we noted from reports still willfully ignored.
The testing showed PFOS levels of 1.84 to 3.41 parts per billion in hay and dry grasses fed to cattle.
Ours is not contaminated and they want to destroy all not in their cult appears rather clear for the thinking.

https://www.youtube.com/watch?v=L2QYcl1CKuQ
Anyways the alleged retards in charge are just simply clueless by intent.

https://www.youtube.com/watch?v=avi9iBC8opU
5. punish the innocent
6. rewarding of the non-participants <-------------------
7. see step one

At some point working will not be worthwhile as the barter economy must be born not to mention rampant crime from these swamp lunatics
in simple plain view.

[Higgenbotham]

Several Michigan Democrats Fail To Condemn ‘Death To America’ Chants

HENRY RODGERS AND ZACK BRAVE
CONTRIBUTOR
April 10, 2024

A number of Democratic elected officials in Michigan failed to condemn “Death to America” chants made at an Al Quds Day Rally in Dearborn, Michigan, late last week.

An activist named Tarek Bazzi spoke to the crowd at the rally calling for “all of” the crowd’s chants and shouts to be directed at America. The protesters can be heard chanting, “Death to America” in a video posted on social media.

https://dailycaller.com/2024/04/10/mich ... en-whitmer

Dearborn, Michigan is a Muslim stronghold.

[Higgenbotham]

This is a list of the types of specialists who might think about collapse.

1. Archaeologists - Done enough digging to realize that much of what they are digging up resulted from the collapse of civilizations
2. Historians - Looked at enough history to conclude that there are patterns of rise and fall that civilizations follow
3. Systems Thinkers - Look at the world as a complex system that is inherently unstable and will break down as limits are hit
4. Theologians - Study religious prophecy and compare to current events to conclude that end times prophecy is being fulfilled
5. Ecologists - Look at population dynamics of other species and conclude that humans are on an unsustainable population trajectory
6. Environmentalists - Look at enough environmental measures (resources, health, climate, etc.) to think collapse is on the near term horizon
7. Whistleblowers - Believe that things are morally and ethically much worse than people realize based on perception of their personal experience
8. Traders - Have studied market collapses and believe these types of collapses are applicable harbingers and models of civilizational collapse
9. Dabblers - Often former professionals and retirees who are widely read and concerned about the future based on personal experience and study

It would take several lifetimes to cover all this ground even if one individual were constitutionally capable of doing it all.

One of the more interesting people who comes to mind is a retired Boeing engineer who was writing about collapse 15-20 years ago. I wonder if the seed that began to form his opinion was based on what he saw inside the company, the results of which are perhaps many years later being seen in the headlines.

[Higgenbotham]

One of the more interesting people who comes to mind is a retired Boeing engineer who was writing about collapse 15-20 years ago. I wonder if the seed that began to form his opinion was based on what he saw inside the company, the results of which are perhaps many years later being seen in the headlines.

Something's Rotten in the State of Washington
An internal letter written 22 years ago by Boeing Engineers detailed exactly what the company's mismanagement would lead to. Their worst fears have all come true.

ANDREW COTE
MAR 22, 2024

Twenty-two years ago a group of Boeing Aerospace Engineers wrote a detailed letter describing how corporate management was leading the major plane manufacturer to its eventual demise, through out-sourcing, cost-cutting, layoffs, and mismanagement, with prescient warnings of how this would impact safety, reliability, and ultimately exact a toll of innocent lives.

Written in 2002 and posted to the online forum airliner.net, the letter eviscerates Boeing over their decision to outsource important design work to international ‘design centers’ - notably one in Moscow, while in subsequent years design centers for software development, including the notorious 737MAX, were opened up in India. The letter details how establishing a large, disaggregated supply chain for plane parts will inevitably lead to errors, mistakes, and oversights, risking the proper functioning of safety-critical systems.

“We are willing to state that Boeing's management is "betting the company" on a misguided and ridiculous outsourcing plan that is gutting the company of its hard-won knowledge base and human assets. The safety and quality of Boeing airplanes is at jeopardy because of the foolhardy actions of Boeing's senior management, and even the hint of safety and quality issues with Boeing's airplanes can have disastrous results for its Commercial Airplane business.”

What has happened in the intervening years is exactly that - a long and sordid list of violations, blunders, mismanagements, cost-overruns, preventable disasters, and more recently, what appears to be violent and murderous cover-up of whistleblowers.

In the following text, italic sections are specific quotes taken directly from the letter with my own context provided. The entirety of the letter is reproduced at the bottom of the post.

https://andercot.substack.com/p/somethi ... e-state-of

Entirety of the letter written by Boeing engineers in 2003:

The Downfall of a Great American Airplane Company - An Insider's Perspective


Subject

Recently, there has been much attention focused on the "Boeing brain drain" that may have contributed to the February loss of Shuttle Columbia. However, most people do not realize that a similar "brain drain" is occurring within the Commercial Airplane division of Boeing.

Because of Boeing's massive layoffs and strategy of offloading design work to foreign design centers, the company has lost control of its engineering processes. The recent actions of the Boeing Company in its Commercial Airplane division are seriously jeopardizing the quality and safety of its airplanes. Hopefully, the company's current course of action will not lead to the same tragic consequences that occurred on February 1, 2003.

Our Credentials

Before we begin, we wish to establish our credentials. Since we are current Boeing employees, we obviously don't want to give information that can positively identify us.

This paper was composed by a group of aerospace design engineers with many years at the Boeing Company. We have been involved in several new airplane programs across a variety of functions and have intimate knowledge of the inner workings of Engineering at Boeing.

We are "in the trenches" every day, involved in the nuts-and-bolts business of designing airplanes. We have a unique and in-depth insider's view of the damage being sown at the Boeing Company by Phil Condit and his cohorts.

Introduction

During the past several years, Boeing Commercial Airplanes has been offloading its design engineering work to foreign "design centers". American engineers and technical designers are being laid off by the hundreds while Russian engineers are quietly hired at the Boeing Design Center in Moscow. Many of the Russian engineers are not nearly as experienced as the American engineers being laid off. Engineering layoffs have cut so deeply into Boeing's talent pool that knowledge has been irretrievably lost. And the layoffs continue.

Soon Boeing may reach (if it hasn't already) a "point of no return" where irreversible damage has been done to the company's ability to design and build safe airplanes, even with its so-called "risk-sharing partners".

Boeing's senior management has often stated that they are not willing to "bet the company" on another new airplane program as they famously did with the 747. They are pursuing a strategy of accumulating a network of "risk-sharing partners" so Boeing can concentrate on its core competency of "large scale systems integration."

We are willing to state that Boeing's management is "betting the company" on a misguided and ridiculous outsourcing plan that is gutting the company of its hard-won knowledge base and human assets. The safety and quality of Boeing airplanes is at jeopardy because of the foolhardy actions of Boeing's senior management, and even the hint of safety and quality issues with Boeing's airplanes can have disastrous results for its Commercial Airplane business.

The former executives of McDonnell-Douglas (which arguably as a company was, in the end, a complete failure in the design and manufacture of commercial aircraft) have taken control of Boeing and seem determined to gut the commercial airplane business - all in the name of "increasing shareholder value". Harry Stonecipher, John McDonnell and Mike Sears, along with Phil Condit and Alan Mulally are destroying what was very recently a vital, dominant American company. These men will probably enjoy massive short-term gains in the value of their stock options, but there is a price; the loss of the long-term viability of Boeing in the commercial aircraft business. We have to look back less than a decade to see where these men are leading Boeing - to the once glorious McDonnell-Douglas Commercial Aircraft division which has since faded into oblivion.

The design and manufacture of commercial aircraft has been a lucrative business for the United States for many decades. The aerospace business has consistently been the largest exporter in the United States economy. Boeing is willingly and recklessly giving this business away to its future foreign competitors.

It is time Boeing's practices become public knowledge.

Some Perspective

It is important to remember that Boeing's commercial aircraft business is a bit different from the standard manufacturing company. Boeing design airplanes - not washing machines, toasters or clock radios.

Every day, millions of people entrust their lives and the lives of their friends and family to the quality of Boeing airplanes. Every day, your and our husbands and wives, sons and daughters, fathers and mothers climb aboard a 727, 737, 747, 757, 767 or 777 with faith that experienced Boeing engineers did their job well. Although many airplane passengers pray to God for a safe flight, it is often Boeing engineers who, with their skill and knowledge, have the power to grant that prayer.

Currently, Boeing is making severe cuts in its design engineering staff. The cost savings probably look great on paper. But the real question is how do these cuts affect a company in which airplanes are designed? Airplanes - on which millions of people fly each year. Airplanes - to which we entrust our lives every time we fly. Airplanes - that can experience catastrophic failure due to engineering errors.

Due to their current strategy of off-loading design work to inexperienced engineers and laying off their own highly experienced employees, Boeing management has created an environment where these errors are much more likely to occur.

The most telling statement about the trend of engineering at Boeing is this statement, which is heard more and more often from fellow engineers: "After seeing how engineering is done here today, I'm afraid to fly on the next new Boeing airplane."

Some Facts About Airplane Design

It is obvious that an airplane, especially a large commercial aircraft, is a very complicated machine to design and build. What the general public does not understand is that, however difficult they think it is to design and build an airplane, their belief is not one-fiftieth as complicated as the reality.

It takes many years of experience to learn the intricacies of airplane design. Not only does an engineer need to understand how to design detail parts, assemblies and installations, but also where the parts are manufactured, how the parts are manufactured and how they are put together. Engineers are required to understand lead-times and scheduling to make sure drawings are released on time to support vendor requirements. The responsibilities of an engineer are immense.

In addition, engineers need to control the configuration of the airplane. The parts that go on an airplane depends on many factors:

1) The base model (737, 747, 757, 767, 777)

2) The derivative (737-700, 737-800, 737-900, 757-200, 757-300, 777-200ER, 777-300, 777-300ER, 777-200LR)

3) Standard options (Small cargo door, large cargo door, overwing exits, in-flight entertainment systems)

4) Customer-specific options (Seats, purser stations, the color of the carpet)

There are literally millions of possible configurations. Knowing which parts go on which airplanes is a very important part of an engineer's job.

The systems Boeing has implemented to control airplane configuration (as part of the DCAC/MRM effort) are immensely complex and constantly changing. There are many technical designers and engineers who spend large portions of their time just learning and understanding these systems. Most engineers only have a cursory knowledge of these systems and rely on local "experts". The problem is that these local "experts" are becoming fewer and farther between and their numbers are diminishing rapidly as layoffs continue.

Boeing is lucky that the FAA does not have an audit planned in the near future.

The Offloading of Boeing's Design Engineering

The key to Boeing's success has never been its plants, tools and buildings, but its superior engineering and its willingness to take calculated risks. Both of these assets are disappearing rapidly.

Although much emphasis has been put on such manufacturing concepts as "lean manufacturing" and "just-in-time inventory", it is important to realize that regardless of the efficiencies of the manufacturing process, an airplane or any product cannot succeed without quality engineering design. In the past, Boeing's elite engineering corps has met the challenge and produced the world's best commercial aircraft.

Currently, Boeing is rabidly pursuing a strategy of offloading engineering design work to overseas "design centers". This process began more than a decade ago with "design transfers" to the Japanese (Kawasaki, Mitsubishi and Fuji Heavy Industries). It continues today at a more rapid and frightening pace.

Boeing Design Center - Moscow

Currently, the fastest growing off-load "design center" is located in Moscow, Russia. There are around 350 engineers employed at this center. They are designing primary and secondary structures, interiors, floors and other systems.

There appears to be a common misconception that Russia is a land of promise where the streets are paved with PhD aerospace engineers begging for jobs. The belief is that not only do these brilliant engineers have doctorates, but they have decades of top-notch aircraft design experience. In addition, they are willing to work for 20 to 25% of the pay that American engineers receive. How can Boeing lose?

The reality is that BDC Moscow is manned with few experienced engineers and many, many greenhorns - inexperienced engineers who have graduated within the past few years. Boeing engineers are being pressured to off-load design work to Moscow - to these legions of inexperienced engineers.

Even if we assume that all of the Russian engineers have PhDs and are experienced, ask yourself the following questions:

1) How and where did they gain aircraft design experience? On what new Russian airplane programs have they cut their teeth in the past 10-15 years?

2) How do Russian commercial aircraft compare to the quality, efficiency and safety of Boeing's airplanes?

3) Which leads to the final question: Based on Russian commercial aviation history, do we really want to fly a commercial airplane designed by Russian engineers?

The Russian engineers have to be given some credit. They are nice guys, likeable and smart with relevant college degrees, but they lack several important traits:

1) Experience designing airplanes.

2) The ability to speak English well enough to have an in-depth technical conversation.

3) The ability to take initiative and to come up with creative solutions.

This final point is an important one. Decades of communist rule have apparently made it difficult for some Russians to make decisions. They want to be told what to do, down to the most minute detail.

Designing a new airplane with the Russians is like working with a bunch of new college hires - except these new hires don't speak English very well - if at all! Are there any volunteers for who wants to fly on their class project?

All that seems to matter to Boeing's senior management is that Russian engineers are significantly cheaper than American ones. It is important to note that although the Russians are cheaper, a number of significant inefficiencies are introduced:

1) The language barrier

a. It is difficult enough discussing technical issues with an American engineer, let alone with a Russian who has only taken 3 months of English classes.

2) Time zones

a. The only way to communicate with BDC Moscow is via e-mail, conference calls and video conferences. The problem is that there is only a 1 or 2 hour window of opportunity to hold conference calls or video conferences.

b. Because of the brevity and ineffectiveness of conference calls, Boeing engineers waste hours and even days trying to resolve issues via e-mail - when it would only take 10 minutes to walk to the next cube to explain to Phil what needs to be done.

3) Physical distance

a. Documents take days to reach Moscow. Once again, if the work was done within Boeing, it would only take 10 minutes to walk to Harry's desk and drop off the document.

b. CATIA models need to be transferred to Russia in a process that takes hours. If the work was done locally, a model could be transferred almost instantaneously.

Out-sourcing has made a complicated process exponentially more complicated. In the engineering world, complicated processes are known to produce one thing consistently - errors.

The initial results on the quality of work from BDC are frightening. Much of their work on recent programs has had to be completely re-done. Changes that were supposed to be made aren't made properly, and changes that shouldn't have been made are widespread. Luckily, (until recently) there have been enough experienced Boeing engineers to catch these errors. This is no longer the case after the last painful round of layoffs. It is only a matter of time before a potentially dangerous error slips by.

Yet another concern is that the majority of Russian engineers working at the Boeing Design Center in Moscow are contract (temporary) employees who are overseen by a much smaller number of Boeing direct employees. What keeps these engineers from remaining loyal to Boeing? There is a very real threat that Boeing will face a situation in the near future where their domestic (American) talent has been ravaged and the Russian engineers move on to other opportunities (such as contracting overseas for much higher salaries or within Moscow at Airbus' newly opened Moscow Design Center).

Is it really a wise business decision to hand over proprietary knowledge to foreign engineers or even worse, foreign contract engineers? Common sense would say no. Phil and Harry seem to think that this is the way to "increase shareholder value".

We think that they are destroying the company.

Airbus in Moscow (and Puget Sound?)

It wouldn't be fair to omit the fact that Airbus has also opened a Design Center in Moscow. However, the main difference between Airbus and Boeing is that Airbus is smart and doesn't intend to have the Russians do primary systems and structures design, instead limiting them to interiors work. Airbus isn't willing to give away the "crown jewels".

In fact, there is a large contingent of Boeing engineers who would welcome the opening of an Airbus Design Center in the Puget Sound region. What better way for Airbus to "stick it to Boeing" than to open a Design Center in Boeing's back yard and poach a large number of highly talented aerospace engineers who would willingly jump ship?

Many of us would be sorely tempted to work at the Airbus Design Center - Seattle. At least with Airbus, we would be working for management that makes rational long-term business decisions.

Boeing's "Core Competency": Large-Scale Systems Integration

Boeing has stated that they want to concentrate on their "core competency", which Phil Condit says is "large-scale systems integration".

Integration takes place at the individual engineer level, which is where Boeing is cutting. The front-line engineer is where the rubber meets the road, but Boeing has made it clear that engineers are merely "costs" to the company, not assets.

The relevant questions to ask here are:

How can Boeing hope to successfully be a "large-scale systems integrator" if they don't have enough experienced, qualified engineers to do the integration?
If Boeing's engineers no longer understand the technical aspects of the airplane's design and manufacturability, how can they integrate?
At What Point Do Boeing's Suppliers Decide They No Longer Need Boeing?

We have heard that Phil Condit's perfect vision for Boeing is where all of the design and manufacturing work is offloaded. Meanwhile, Boeing (consisting of Phil and his secretary) sits in a penthouse office in Chicago at the top of the pyramid and collects a fat profit margin, thus "enhancing shareholder value". As comic as this may seem, it is probably not far from the truth.

Boeing is throwing away thousands of irreplaceable engineers while giving away to its vendors knowledge based on decades of empirical data from Boeing's countless tests and studies. This knowledge, both in the Design Manuals and in the engineers' heads is Boeing's competitive advantage.

Boeing is training and arming its future competitors.

The Boeing vision is that eventually the "partners" will design and manufacture body sections, already "stuffed" with the required systems (electrical wire bundles, hydraulics systems, insulation, etc). All of these activities would be coordinated and "integrated" by a small staff of Boeing engineers. The body sections would then be shipped to Everett (or Wichita or Long Beach or Fort Worth), where a small group of Boeing assembly workers would button the sections together.

In all honesty, does this deserve the lion's share of the profits? How much better can the Japanese complete this function in Japan?

At what point do Boeing's suppliers decide that they no longer need Boeing?

JAI (consisting of Mitsubishi, Kawasaki and Fuji Heavy Industries) is more than capable to do the manufacturing. In addition, they can do the stress analysis and design work. Boeing has spent the last 10 years handing over their computer "templates" for stress analysis - along with books containing all of Boeing's hard-won knowledge of fatigue analysis, structural damage tolerance and corrosion prevention, which was accumulated over decades of testing and in-service experience.

If JAI is capable of doing both the design and manufacturing of airplane structural components, Rolls Royce, Pratt and Whitney and GE provide the engines, Rockwell-Collins provides the avionics and interior components are BFE (Buyer Furnished Equipment), what does Boeing bring to the table? Boeing's doing the easy part! Why would these companies allow Boeing to sit at the top of the pyramid and take the fattest profits? (Hint: The answer isn't "Boeing's core competency of large-scale systems integration".)

Employee Morale

How can current employee morale, especially among Boeing engineers, be described? There is no hyperbole too outlandish to describe how low morale has fallen.

There is a strong adversarial feeling that has developed among engineers against management - especially upper management. Engineers believe that management would like nothing more than to eliminate the entire Boeing engineering department. Perhaps they're right.

There is a pervasive feeling of doom and fatalism. Engineers believe that there is no future for them at Boeing. The engineers with 20 or more years at Boeing are stoically waiting for that golden day when they will retire and wash their hands of the mess that Phil Condit and Harry Stonecipher have created.

It is frightening to see how few experienced engineers are left in the company. When the company is forced to bring in contractors to do high-level design work, it is indicative of a major problem. There are not enough people left to do even a small development program. How will Boeing handle the 7E7?

In addition, Boeing is handing out WARN notices to direct employees while these same employees are surrounded by on-site Russian and Japanese engineers!

Performance Management

One of Boeing's criteria in its "Performance Management" is to measure how front-line management and lead engineers are offloading work to Moscow. The more work the lead engineers and managers are willing to offload and the bigger the smile on their faces as they do so, the more likely they will not be laid-off but will be promoted and given raises.

Can you imagine it - having your career depend on how willing you are to give your job away and to train your replacement in the process? Even if you are cheerful in supporting the offloading of engineering work, your reward may still be a WARN notice. How's that for a morale-builder? How's that for an environment in which airplanes are designed?

The 7E7 and Future Airplane Programs

It can arguably be stated that Boeing has cut their engineering staff so deeply that they do not have enough remaining talent to tackle a new airplane program.

It is well-known that Boeing's engineering staff is greying. Many of the engineers are within 10-15 years of retirement age - and most of those are counting the years, months, days, hours and minutes until that magical time. Trust us when we say that there has already been a huge loss of "tribal knowledge" that can never be recovered. In 5-10 years, when these greying engineers begin to retire, the resulting knowledge loss may well prove fatal to Boeing Commercial Airplanes.

Boeing is rapidly approaching, if they have not already passed, the "Point of No Return". The layoffs have been so deep that knowledge and engineering ability has been irrecoverably lost.

The Effect of Development Cost on Product Quality

There were a series of lessons supposedly learned from the fantastic success of the 777 airplane program. A tremendous amount of money was spent developing this airplane, much of it on trail-blazing new techniques such as:

?? Concurrent Product Design

?? Digital Pre-Assembly/Mockup

?? Co-location of personnel (i.e. designers, stress analysts, manufacturing engineers)

?? Integration of customers into the design process

This "front-loading" of cost, where money was spent on the engineering/ development of the airplane, paid off spectacularly. The rework in the factory dropped precipitously, saving millions in ongoing manufacturing costs. The number of rejection tags dropped by over 50%. The factory said that building the 777 was like putting together Tinker Toys.

Today, the 777 is one of Boeing's two best-selling airplanes.

However, now Harry Stonecipher and John McDonnell want to cut development costs on the 7E7 to 40% of 777 levels. Do they expect to get an airplane of similar quality to the 777 for that price?

Engineers are already forced to make unpleasant compromises with their design because of the shocking scarcity of resources - compromises that threaten the quality, safety and performance of the airplane.

We believe that Boeing Commercial Airplanes is headed down the same path as McDonnell-Douglas. Tight-fisted executives dole out miserly portions of budget to "save money" and "increase shareholder value". What they end up with are inferior products that fail in the marketplace.

If proof is required, ask yourself: "What is left of McDonnell-Douglas' commercial aircraft business?"

The 717.

Isn't that proof enough of where Boeing is being led?

Are we willing to entrust the future of Boeing's Commercial Aircraft business to the same people who destroyed McDonnell-Douglas?

Conclusion

The Boeing Company is headed down a dark and dangerous path. It is heading down this path at a reckless pace with little regard to long-term consequences. High-level executives are making decisions that, on paper, may look promising, but are in truth destroying the company. The safety and quality of Boeing airplanes is at jeopardy because of the foolhardy actions of Boeing's senior management.

There has been little discussion about this in the media. Perhaps this story is not newsworthy. However, everyone with whom we have spoken has been...let's say "shocked" (although that does not do it justice)...when told of what is going on. We am not prone to exaggeration. We are engineers. We live and breathe logic and facts. We are witnessing first-hand the destructive effects of Phil Condit's "Vision 2016". There may not be a Boeing Commercial Aircraft Company in 2016 because of Phil Condit.

What has been described herein is truth. We can only hope it also turns out to be "newsworthy".