Staggering numbers

The numbers are just staggering and they keep mounting: Panasonic is closing 27 plants and laying-off 15,000 workers. What does this fact tell savants? Answer: that Panasonic clearly expects the world-wide depression to be deep and long-lasting. You don't close one plant much less 27 just to cope with an ordinary recession. You certainly don't close plants if you anticipate a recovery that will require your pre-recession productive capacity ramped up to meet newly growing demand. Closing plants is serious, expensive business that you do if and only if you believe that such productive capacity is permanently redundant and must be written-off and discarded. You do that if and only if the market has fundamentally changed--in this case, it has seriously shrunk--and you believe that such a change is permanent. Obviously, Panasonic believes this to be the case. Since politicians won't tell the truth about the state of the world, we must depend on our observations of businesses--they can't afford to play the fool. This announcement from Panasonic shouts "great depression" to anybody with normal hearing. What a tragedy that the world's leaders won't pull their fingers out of their ears and listen and then respond correctly. We're falling down a bottomless pit.

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