Well, looks like Labor Day is upon us. To most people, Labor Day signals the "end of summer". (Although I think that for parents summer ends when school starts and school sure seems to be starting earler and earlier each year.)

But Labor Day isn't just the "end of summer". From one perspective it represents everything that is great and everything that is not so great about our country. So I am intentionally taking a break from our favorite subject of retail this week.

Labor Day was originally created by (guess who?) labor unions. In fact, it was dreamed up by someone in the Central Labor Union of New York in 1882. The original idea was an acknowledgement and celebration of the people (i.e. union members) who were creating the amazing world of the late 19th century. In other words, let's get together and have a parade honoring people who are producing things. Take "union mmebers" out of the equation (so we are not excluding anyone who is producing) and I think THAT is a fantastic idea.

It was the industrial revolution and America was spooling up to a level of production that had never been seen before anywhere in the world. It truly was fantastic. It catapulted America into the economic superpower that we were.

Sadly, we went from this fantastic level of production to where we are today. Not as a comment on labor unions, but more as a comment on the state of production in America, by 1967 we had hit the level of my family's 1967 Ford Country Squire station wagon. One of my father's fraternity brothers had a Ford dealership so it's no surprise we had a long line of Fords when I was growing up. But the 1967 Country Squire was pretty much the nail in the coffin on the Levine family Fords. It had that simulated wood paneling decal on the sides. It was also a color called "salmon coral" which everyone else called "pink". (Yes! We had a pink station wagon.) And because "salmon coral" was a Thunderbird color (seriously?) and not a Country Squire color, it had been ordered and specifically built and painted for us.

The first day we had it we discovered that someone had left a screw or bolt or something in the bottom of the passenger side front door. Probably dropped it in there and that was that. Every time you accelerated, this object would roll and bump its way to the back of the door. Every time you stopped it rolled and bumped its way to the front of the door. Now you can argue that this didn't prevent the car from driving and fulfilling its primary function of transporting people. But it made my father crazy. The second day we had it, he went around the interior with a screwdriver and tightened all the loose screws.

Now - whether or not the car was built by union members is beside the point. That it was built by people who no longer cared whether or not anyone would want to pay money for such a car IS the point. So you can see that by 1967 we already had production problems. Because if you are producing things people do not want to buy it doesn't matter how many you can make.

Let's run that up about 40 years to today. At the point where the "s" hit the fan at Bank of America/Merrill Lynch and the stock market crashed and it was pretty obvious to anyone alive that we were in deep ka-ka, our President went on TV and said one of the most incredible things I have ever heard. He said, "American businesses can no longer get the credit they need to keep the economy going."

Oh my god! Did he just say that? And was he serious? (He was referring to the fact that banks had stopped lending - basically because they had no assets).

The incredible part was this concept that debt kept the economy going!! If it hadn't been obvious to me before, it was certainly obvious at that moment. He was serious! He (and a bunch of other poeple) seriously think that debt keeps an economy going. "Not making money?? Don't worry!!! Just borrow more!!!"

I suspect you have to be an economics major to not think there is something very wrong with that statement. (And it does explain a lot of the odd things that have been going on around here!)

I think we conclusively demonstrated during the industrial revolution that it is production(!!) that keeps an economy going. Production of products that people will buy.

Given some of the odd ideas our leadership have, I suspect it is pretty much up to us to turn things around and get ourselves back to prosperity. Now, I would be stupid if I thought we were going to go head-to-head with a billion Chinese armed with injection molding machines and win. So it's probably going to require something else.

Whatever that is is probably as individual as each of us are. But I do know that it will have to start with once again creating a level of real production that we haven't seen here in a while. And Labor Day seems like a great time to start!

Malcolm