Dean Barber

Archive for January, 2012|Monthly archive page

Our Trilogy Ends with One Smart Dog

In Uncategorized on January 29, 2012 at 8:39 am

I’m going to triple down on the subject of manufacturing, not only because it has been in the news a lot lately, but also because it is a subject of great importance to our country. This big story deserves a trilogy.

And besides, this is my blog. As such, I take full responsibility for its content, but respectfully not for what you understand. I am heartened that most of you do get it.

How the United States fits and will fit in the world is largely dependent on its manufacturing environment. Ultimately, this is an issue of national security  involving trade, innovation, and future job creation. Important stuff.

From my two earlier blogs this month, we learned a few things. Well, at least I did.

1)    The United States is and remains a manufacturing powerhouse in the world, despite a hemorrhaging of millions of manufacturing jobs. In fact, we have picked up about 334,000 manufacturing jobs in the past two years.

2)    There is some evidence that re-shoring or insourcing will take place, as U.S.-based multi-national corporations are seeing higher wages in China and other offshore locations and have a better understanding of the vulnerability and cost of extended supply lines.

3)    Factories of today little resemble the labor-intensive factories of old as technological advances have resulted increased efficiencies requiring fewer plant workers while industrial output has exploded. Translation: We are making  more stuff with fewer people.

4)    Factory workers today are different kind of cats than that of the parent’s generation. Workers in today’s manufacturing plants have to think on their feet and be problems solvers. The days of graduating from high school and getting a factory job with no skills are over. Skilled workers, however, are in great demand.

5)    I can’t think of No. 5 yet, but I bet if you read my prior two blogs that you can come up with a No. 5. Heck, maybe we can even come up with a No. 6, too.

Recently, I had the pleasure of having a 30-minute telephone conversation, ostensibly an interview, with Bill Taylor, president of the Economic Development Partnership of Alabama. Prior to his life in economic development, Taylor was the president of Mercedes-Benz US International. So he has seen both sides of the fence.

For a decade, Taylor was in charge of a $1 billion investment  in Tuscaloosa, Ala., a plant that literally transformed Alabama’s economic development fortunes. He has been on the front line of manufacturing for more than four decades, having also worked for Ford and Toyota in Canada. In short, he understands manufacturing and the forces and nature of competing in global marketplace.

So what did he have to say?

Well, a lot, but I won’t tell you all here today. I’ll save some for a later blog. But Taylor says manufacturing in America and the West in general is constantly rethinking and reinventing itself with technological innovation in order to compete. As such, more responsibility is being placed on the shoulders of those on the factory floor.

“There is no such thing as a blue-collar worker. That is long gone,” Taylor said. “Most people working on factory lines today are asked to problem solve. They are asked to maintain and really understand the piece of equipment. Management now goes to these so-called blue-collar workers to ask, “What do you think?”

“We now call that person a ‘junior engineer’ because they are really asked to do what engineers would have said at one time was their job. And now we have engineers performing more like teachers, mentors, to help people have a greater depth of understanding of what they are doing.”

And while it is true that the never ending quest for greater productivity has resulted in an increase in robotics and automation, eliminating some manufacturing jobs, those very same technological advances also created other jobs elsewhere.

“Sometimes we fail to look at the whole picture, and look at what other jobs are being created as a result of technology advancements,” Taylor said. “Now the job creation is not necessarily inside that particular factory, but the jobs created are an integral part of the workforce that may be housed inside the factory.”

Somebody has to write the software. Somebody has to design the electrical and mechanical systems. Somebody has to support the technological innovation going on within the factory walls plant and those support players may not even be characterized as manufacturing jobs. Still, they resulted because of advanced manufacturing.

“So the spinoff of jobs is something that we don’t fully understand yet, because in many cases we really don’t understand what manufacturing is these days,” Taylor said.

The more I thought about that, the more I realized how deep that statement was. Here’s a manufacturing guy saying, in effect, that we are now pushing new frontiers in even defining what manufacturing is, much less the jobs of the future.

So there are reasons to be optimistic. The United States can and should continue to be a leader in manufacturing technologies and in making things. But Taylor says this notion is founded on the basis that our education system responds accordingly. If our schools do not turn out students with strong backgrounds in math and science, those equipped to be the skilled workers of the future, we are in for a tough slog ahead.

“If our education system doesn’t improve its alignment with business and industry, then probably it’s predictable what the outcome will be. I don’t think we are there right now, but certainly we need to refocus on just exactly what the needs of business and industry are and make sure that our education system is running in tandem with those needs. That is the big challenge,” Taylor said.

Despite the ineptitude displayed on a regular basis by a divided Washington and by the self-serving interests of certain teachers unions, I believe our schools will respond and are in fact responding now.  I am optimistic that America will address this deficit in skilled workers, simply because we have to.

The fact is that American workers are the most productive in the world. About a year ago, I reported in this blog that China had marginally overtaken the US as the largest manufacturing economy. China’s estimated manufacturing output, according to market researchers IHS Global Insight, reached $1.995 trillion compared to total US manufacturing output of $1.952 trillion in 2010.

But here is the kicker: It took over 100 million Chinese workers to create that amount of manufacturing value – compared to just 11.5 million workers in the US. In short, our manufacturing industry is about 10 times more productive than the Chinese. It is the combination of skilled labor and complex machines that gives American factories our big edge.

What that means is that a wave of re-shoring does happen (it’s certainly being talked about a lot right now), fewer people will be required to build the same volume of things simply because of our productivity. Writes Paul Tate, executive editor of Manufacturing Executive:

“If production does move back from East to West big time soon, it may certainly help western GDP, company revenues, probably profits, and maybe even national pride, but to think it will sweep away mass unemployment seems overly ambitious.”

In an election year, national pride is something to be leveraged. Now I try to shy away from politics in this blog. It is my hope that you cannot discern whether I am a Republican or a Democrat. If I identified myself of either camp or expounded very much on the politics of day, some of you would rightly shut me down.

So it is with trepidation that I commend the president for his remarks and emphasis of late on the importance of manufacturing. I happen to believe that he is sincere in wanting to encourage and support our manufacturing sector and seeing a re-shoring wave take place. But it also makes for smart politics.

A recent industry poll by Cook Associates showed that 85 percent of the 3,000 manufacturing executives surveyed  expect some factory work to come home. But nobody knows how many jobs may be involved. There are some estimates as high 2 million. But I don’t think we will see numbers like that. Quoting Tate again with Manufacturing Executive:

“But those jobs will be different and there may not be as many, or for as long, as some expect.”

The challenge will remain — re-educating a workforce capable of grasping new precision  technologies and the new opportunities that will surely come as a result of those advancements. The march toward innovation and increased productivity is our destiny if we are to remain the manufacturing leader of the world.

So the megatrend to make more stuff with fewer people will not be denied in the long run, even with the advent of re-shoring. Manufacturing and agriculture employed one in three workers just after World War II. Today, one in eight. Eventually, it will be one in 10.

Apparently, there is a joke making its rounds today in manufacturing circles. I first heard it from fellow traveler and consultant Mark Waterhouse:  A factory employs only a man and a dog. The man is there to feed the dog, and the dog is there to keep the man away from the machines.

Now you have to admit, that’s one smart dog.

Need a partner in results-oriented site selection? Contact Dean Barber at 972-890-3733 or at dbarber@barberadvisors.com Barber Business Advisors, LLC, is a site selection and economic development consulting firm based in Plano, Texas. Please visit our website at www.barberadvisors.com

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Stupid Is as Stupid Does: A Renaissance in Perspective

In Uncategorized on January 15, 2012 at 8:51 am

If you read the headlines, listen to the pundits and the president, you would think that we are about to enter into a manufacturing renaissance in this country. Suddenly, it has dawned on many companies that this country might actually be a pretty good place to make things after all.

Well, we’ve been that good place all along. It’s just that companies have to be smarter to play smarter in a manufacturing environment in the United States.

This blog will be an extenuation of last weeks’s blog, “Where the Buffalo Roam: Observations on Manufacturing.” Forgive me, but I feel I needed more space to keep on observing.

If you read last week’s blog, you might recall that I am a son of manufacturing, and that I only sought out a college education to escape the prospect of being permanently maimed in the foundry.

A locomotive bell housing did the convincing. It fell off a pallet while being moved by a fork lift truck. I happened to be nearby, grinding away on castings when I suddenly found myself pinned under said bell housing on a black, sandy floor.

Soon afterwards, I enrolled in a major midwestern university where I majored in beer. It seemed like the right thing to do at the time.

I probably should not tell that story, even if it is true, because it perpetuates what is largely a myth about working in manufacturing. People often conjure up ideas that factories are something out of Dante’s Inferno.

A Need for Talented Piddlers

But the truth is that today’s factories are much different.  Now, we let the machines do most of the work, and we piddle around to make sure they stay working, spitting out widgets.

So if you have the technical skills needed, which is no small feat, and have a talent for piddling and thinking on your feet, well then you might be well suited to a career in manufacturing. And if that happens, there is a good chance that you will make more money than many white-collar service jobs.

I’m sorry but the Joe Lunchbucket in me would like to see a world in which  factory workers, people who actually make things, would make more money than banksters maneuvering the credit default swaps market. Silly me.

So I knowingly celebrate and even romanticize manufacturing, knowing full well that it will not even come close to being what it once was in this country. Never. Still, some people continue to fool themselves with wishful thinking, like the Plains Indians who pine for the return of the great herds of buffalo.

A short recap from last week. Manufacturing employment in 1979 at 19.6 million workers. Today, factory jobs number about 11.8 million, a decline of 40 percent from the high and representing about 9 percent of all jobs in America.

The Bombshell We Know

Much of the blame for the implosion has been placed on a phenomenon that has been taking place since the 1960s. That’s when corporate executives started adjusting their global sourcing, with the goals of reducing costs and maximizing profits.

And as everyone who hasn’t been living under a rock knows, there was a large shift from suppliers in the US and other high-cost countries to suppliers in low-cost countries. This thing called “off-shoring” has been a bombshell to many communities.

But as I suggested in  last week’s blog, I believe the main real culprit to lost manufacturing jobs is not off-shoring but rather technological advances that increases productivity. Translation: More automation, less people.

Worldwide manufacturing jobs have been falling while industrial output has been increasing all because of advances in productivity. Even China has been  losing manufacturing jobs.

Now, I know what you are thinking. You would say that we have been growing manufacturing jobs in this country steadily for the last two years to the tune of 334,000 jobs. And you would be correct – 23,000 factory jobs were created just last month. The Center for Automotive Research predicts that the auto industry and its suppliers alone could add 167,000 American jobs over the next three years.

Let’s hear it for a renaissance. But consider for a moment that manufacturing may be rebounding precisely because it was so badly hammered during the recession. Yes, 334,000 factory jobs sounds great, but keep in mind that it follows a decline of 2.3 million manufacturing jobs in the two years before that.

Decades of Dawning

If we could somehow magically bring all the off-shored manufacturing jobs back to the United States, it would be but a fraction of the jobs already lost, most of which, again, are due to investments in technology requiring fewer people on the plant floor.

Manufacturing may comprise 9 percent of all jobs today, but eventually that number will erode to 7 percent, and then 5 percent, and then 4 percent, all because of productivity efficiencies as the result of innovation and technology. It that sense, manufacturing will mirror farming, which was also once also a dominant sector for jobs.

The truth is that manufacturing, while vital in terms of national security, as is agriculture, will never be the jobs panacea that it once was. A new age has dawned. Actually, it’s been dawning for decades now.

And it is also important to note that most U.S. multinational corporations have been adding jobs in other countries partly because that’s where an increasingly large share of their sales are. Companies in the Standard & Poor’s 500 index now earn more than half of their revenue from overseas.

So it’s not always about chasing cheap labor. It’s also about chasing customers.

Admissions of Guilt and Failure

Still, the idea of re-shoring remains a popular notion and certainly makes sense for some companies. Hey, I want to see it happen as much as anybody else. Certainly, President Obama in an election year wants that.

This past week, the president hosted a high profile event at the White House, to demonstrate that re-shoring was happening and that he was all for it. Ford was there, as was Intel and Master Lock, all with stories to tell about how they had seen the light and it was shining bright over the good ol’ US of A.

And, yet, that may entail an admission of sorts of failure. Nobody wants to especially look foolish – “Well, we really botched things up by opening that plant in Becki, Becki, Beckistan, but we now we know better. We should have listened to Herman.”

Surrounded by representatives of more than a dozen companies, the president pledged that he will propose new tax incentives to reward companies that invest in U.S. expansion or bring back jobs from overseas and eliminate of tax breaks to companies that move jobs outside the country.

We don’t yet know the details of this tax initiative, which will be part of the fiscal 2013 budget plan that is to be sent to Congress the first week of February, but the attending business execs seemed pleased.

“We are in a unique moment, an inflection point, a period where we’ve got the opportunity for those jobs to come back,” Obama told the group at the White House. “The business leaders in this room, they’re ahead of the curve. They recognize it.”

At least some execs may be recognizing it precisely because their plant in Becki, Becki, Beckistan (a country that Herman Cain knows all too well) turned out some real junk that caused them all sorts of grief. And now they are facing workers there that are demanding higher pay because camel feed has hit the roof. So why not bring operations back home, where they know that they’ll have a more productive and skilled workforce.

Besides, those Beckistans have a different word for everything.

Among the business executives present at the White House was Mary Murcott, CEO of Fort Worth-based NOVO 1. Her company is dedicated to bringing offshore call centers jobs back to the US, a trend she says is already happening.

“They’re coming back, but nobody’s talking about it,” she said during the CEO panel and as reported by the Fort Worth Star Telegram. “Nobody wants to talk about the mistakes they’ve made.”

It’s times like these that I cannot help but think of Forrest Gump: “Stupid is as stupid does.”

Ms. Murcott said the number of high tech call center jobs that were offshore has dropped from 30 percent to 12 percent, with the realization that customers in this country were not being well served.

“I think people have done a lot of brand damage by putting their call centers over there,” she said. “The fact that they pay half the cost in labor costs doesn’t make any difference if it takes three calls to get the job done.”

So what does this all mean? I will grant you that there will be a re-shoring of some jobs back to the sweet shores of America and that will benefit certain communities. No question about it. But it won’t change the tide. Those forces are too great.

Manufacturing employment has been declining steadily for three decades in absolute numbers, and as a share of total employment for six decades. That megatrend will continue as we continue to automate.

For unskilled workers, it means that manufacturing will no longer be that ticket to ride to the middle class. That train has left the station.

Need a partner in results-oriented site selection? Contact Dean Barber at 972-890-3733 or at dbarber@barberadvisors.com Barber Business Advisors, LLC, is a site selection and economic development consulting firm based in Plano, Texas. Please visit our website at www.barberadvisors.com

Where the Buffalo Roam: Observations on Manufacturing

In Uncategorized on January 8, 2012 at 8:00 am

Back in 1928, Robert Murray Haig came up with the rather bright idea of economic base analysis. Now Ol’ Bob never won a Nobel prize in economics, but some of his ideas serve as a foundation for much of the way that economic development is practiced today.

Along the way, Bob wrote some humdinger books, like “A History of the General Property Tax in Illinois,” and my favorite, “The Public Finances of Post-War France.” Real page turners.

Bob postulated that there were two types of business operations in any given locale. There were those that exported goods or services outside the region, thereby essentially bringing money back home from outside. He called them “base” or “basic” industries.

Then there were essentially everybody else — businesses that served the local market exclusively, often in a supporting role to a base industry, with money that was pretty much recirculating within the community.

Now you can poke holes at Ol’ Bob’s theory on economic base analysis on a lot of different levels, but you cannot deny he was onto something.

In the wild and wooly world of economic development recruitment, much of the emphasis has been on concentrating on attracting base industries, (whether they know it or not) on the theory that these business enterprises are the ones that are more likely to build wealth within a community. I think that theory is largely correct.

Silicon Valley is not a rich place because of a clustering of Burger Doodles.

For most economic development organizations (not all), manufacturing has been the golden calf and for good reason. Manufacturing is a base industry, and has historically formed a bedrock of wealth and stability for a community largely because of good paying jobs that resulted.

As you well know, the bedrock has been eroding for decades for reasons we will explore here. Yet, many if not most economic development organizations still plug away on the hopes of bagging an industrial beast. And I truly understand that, largely because they have been put in the jobs-creating business, whether that is a reasonable expectation or not.

Unrealistic expectations are the primary reason why economic developers lose their jobs. But that’s another blog for another time.

I have brought some beasts, and that is not a reference to temperament but rather impact, to some communities and have seen the resulting positive effects. I have been that buffalo hunter, but over the years have witnessed the thinning of the herds.

The decline in manufacturing employment, which peaked in 1979 at 19.6 million workers, has been long and painful. Today, factory jobs number about 11.8 million, a decline of 40 percent from the high.

It is tempting to blame China or Mexico for our shuttered plants. It is easy to demonize the companies that shut down plants here in the United States, only to shift operations abroad in search of cheap labor.

But I suggest the root cause for the astounding job losses in manufacturing has been advances in technology. It’s the robots, the software, and the more effective machines and gadgets that populate factory floors with greater frequency.

Lately, it seems that everyone and their brother has been writing about a manufacturing renaissance in this country. They correctly point out that wages in China are rising and that the transportation costs associated with long and vulnerable supply lines make re-shoring a winning strategy.

Well, that may all be true. And I will concede that there is currently a rise in manufacturing jobs in this country, possibly as a result of some off-putting experiences of U.S. manufacturers in China and elsewhere. But I’m here to tell you that job growth in manufacturing that is now taking place is bucking a long-term megatrend.

It all comes down to efficiencies in production. As we automate (usually in response to cheap labor abroad), we become more productive, and as a result, we simply need fewer bodies. That’s the real story behind manufacturing.

From an emotional standpoint, it hurts me to come to this realization. Manufacturing meant the bread and butter in my home, the reason my family attained any sort of  middle class values and lifestyle. Manufacturing or rather my father’s job in manufacturing was the precise reason why I was the first in my family to go to college.

After graduating from high school, I didn’t go to college right away, much to the concern of my parents. I just wasn’t ready. Instead, I worked for two years smashing my fingers and toes in a grey iron foundry outside Milwaukee. It was the foundry that convinced me that going to college was probably a pretty good idea after all.

But until I made that move, I lived and breathed the rigors of foundry work, which was hot, dirty, dangerous, and always exhausting. Yet, I will always treasure that experience, as it gave me a certain depth and level of strength that I didn’t know I had. And I will always respect the men who hung in there and did that work.

To this day, I still carry some very Joe Lunchbucket views on life, and I don’t apologize for that. I hate pomposity, which is almost an everyday occurrence in business.

And you want to hear something crazy? Five years after I left the foundry and graduated with a bachelor’s degree from the University of Wisconsin, my first job as a newspaper reporter in Columbus, Ga., paid less than my job in the foundry.

But I digress. Going back to my point about productivity, we’re making more stuff for less money and with fewer workers. In that regard, manufacturing is mirroring agriculture. Because of productivity gains, farm employment today represents only about 2.5 percent of total employment compared to more than 12 percent of America’s workforce in 1950.

In the early 1800s, 80 percent of both U.S. employment and output were directly tied to a labor-intensive farming sector. But over time, technology revolutionized farming, resulting in huge increases in farm worker productivity and reduced farm employment.

The very same thing is happening today with manufacturing.  Since 1995, even as manufacturing employment has dropped around the world, global industrial output has risen more than 30 percent.

Between 1995 and 2002, 22 million manufacturing jobs disappeared worldwide, according to the findings of economists at Alliance Capital Management. The United States lost about 11 percent of its manufacturing jobs in that period, while the Japanese lost 16 percent. Even China had a 15 percent drop.

Productivity growth tends to follow business investment with a long-time lag time, and you would be right to point out that business investment in equipment, software and factories has been at near historic lows for a decade now. As I said in my last blog, we live in a time of fear and caution, where corporate America is more content to sit on cash rather than risk investing it in new plants and equipment.

I get that — low investment today may constrain productivity increases in the future. But  advancements in technology loom, resulting in greater efficiencies, greater productivity and fewer factory workers.

Lately, however, you might not get that notion.  Since February 2010, the economy has added 2.4 million jobs through November, of which 302,000 were in manufacturing. Factories added 23,000 workers to payrolls just last month.

The Institute for Supply Management survey of manufacturers has shown more companies planning to hire than to fire in every month since October 2009. That string of 27 months is the longest such string since 1972.

But I still look at what happened in farming and think about the long term.

I also ponder about the new kinds of jobs, some of which we couldn’t have even imagined a decade ago. They come as a result of knowledge and innovation.Writes former Secretary of Labor Robert Reich:

“A growing percent of every consumer dollar goes to people who analyze, manipulate, innovate and create. These people are responsible for research and development, design and engineering. Or for high-level sales, marketing and advertising. They’re composers, writers and producers. They’re lawyers, journalists, doctors and management consultants. I call this “symbolic analytic” work because most of it has to do with analyzing, manipulating and communicating through numbers, shapes, words, ideas.”

So rest assured that there is a future. There will be jobs, just not many routine manufacturing jobs. The jobs of the future will be more demanding for those who lucky enough to avoid and escape businesses that need people but not high skills.

On a personal level, I expect to continue to help manufacturers and other business enterprises in my capacity as a site selection consultant. It’s what I do. It’s what I love. And I would be lying to you if I told there was no lure to the hunt. There are still buffalo out there.

I hear there is a big herd over to the west. I think I will go there and try my luck. But I won’t be hiring another hunter to join me. You see, I bought this new software …

Need a partner in results-oriented site selection? Contact Dean Barber at 972-890-3733 or at dbarber@barberadvisors.com Barber Business Advisors, LLC, is a site selection and economic development consulting firm based in Plano, Texas. Please visit our website at www.barberadvisors.com

The Future: Average is Over But World Survives

In Uncategorized on January 1, 2012 at 8:17 am

Our first blog for 2012 will be about what the future portends. Now I do not claim to be a futurist with great insight. I’m not even an economist, which means I have a shot at getting something right.

No, I am just a consultant who happens to read a lot and listen to people. So beware.

It would be tempting to pronounce that “America is at the crossroads.” If you listen to the pundits, America is always at the crossroads, just as Realtors say that “now is the time to buy.” When did they not say these things?

But America in 2012 does stand in stark contrast to many preceding years. We are living in a time of high anxiety, when 20 million homeowners are in a home that is worth less than their mortgage or in peril of becoming that, or it’s in foreclosure.

And there is this nagging underlying tension that many Americans feel that they are not included in a lot of what is going on, witness the rise of the Tea Party and Occupy Wall Street, two sides of the same coin.

Connected on Steroids

We have gone from a connected world to a hyper-connected world, according to New York Times columnist Tom Friedman. Companies worldwide now have access to more cheap automation, cheap software, cheap robotics, cheap labor, and cheap genius than ever before.

Much has been written lately about an eventual resurgence of manufacturing in America. Many have predicted that a sizeable and measureable re-shoring trend will take place, from China to America, because of long and vulnerable supply lines and the rising cost of labor in China. I have been guilty of writing the very same things.

But now I wonder if I am not engaged wishful thinking. It is precisely because of the cheap robotics, the cheap automation and cheap genius that I cannot be bullish about our manufacturing sector creating more jobs for the long term. Notice I said the long term.

We will continue to make great strides in production efficiencies through technology advances, which will simply mean that fewer bodies will be needed. That’s the long-term, my friends, even at a time when manufacturers struggle to find the kind of people they do need. I hope to devote a future blog soon on why manufacturing is mirroring agriculture production in this country.

A Democratizaion of Ideas

We are also seeing the democratization of so many things, according to Friedman.

“We’re seeing the democratization of information. Everyone’s now a broadcaster. We’ve seeing the democratization of weaponry. Everyone, you know, can–is becoming super empowered. We’re seeing the democratization of innovation. Tiny groups can now take on big companies,” Friedman said recently as a panelist on Meet the Press.

“And most of all, we’re seeing the democratization of expectations. Everyone, whether you’re in Tahrir Square or in India or Israel or Wall Street, feels they’re entitled to the same rights, participation, and justice.”

Witness Time’s Person of the Year – the protester.

Average is now officially over. Kaput. To make it today in charged, hyper-linked world, we have to bring our A game, pure and simple. We have to be smarter and offer more.

’’We’ve all got to find our extra, come with something new and extra to the table,” said Friedman.

Not Mere Boobs

A super connected world with a democratization of information and innovation has created more opportunities to make big money fast. But it has also created huge income gaps. That growing disparity gnaws at the conscious of America, particularly at a time when the middle class has been essentially evaporating.

Now the word “talent” does not come to mind when I think of members of Congress. Rather, it’s more like “boob.” But the financial gap between Americans and their representatives in Congress has widened considerably, according to an analysis published last week by The Washington Post.

Between 1984 and 2009, the median net worth of a member of the House more than doubled, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home ­equity.

Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.

What does this mean? Well, I no longer think of Congress as populated by mere boobs. No sir, now I see them as smart, devious, even potentially corrupt boobs. Big difference.

They Were Wrong

Certainly, that sounds cynical. But we live in a cynical time, because nearly everything we’ve been told in the last five years has proved to be wrong. We were told officially that the recession was over in the spring of ’09. Oh really?

In his recent book, “The Time of Our Lives,” Tom Brokaw learned just how frightened many Americans have become.

“I write about something that I had not heard in the 50 years that I’ve been a journalist, and that would be parents and grandparents coming up to me and saying, “I don’t think my children are going to have the lives that I’ve had.” I’ve just never heard that before because that goes right to the heart of the American dream.”

Friedman says the country today is not just economically down, but it’s emotionally depressed.

“We feel like we’re children of permanently divorcing parents, and in this environment, a lot of people just are holding back.”

Given this environment of fear, Mark Sweeney, a site selection consultant based in Greenville, SC., says it is amazing that any capital investment has taken place.

“Uncertainty is the enemy of capital investment,” Sweeney recently wrote. “For companies, that will mean combined caution and exploration of alternatives that do not include new facility investment.”

But it is because we have been living in age of caution and fear, may propel us forward, according to Brokaw. The American people are simply  tired of being down and want to break out of this funk.

“I think the country is ready for yes, and not for no. We’ve been spending a lot of the last couple of years dealing only in no. ‘We’re not going to go there. We can’t do it.’ I think the country wants big, bold ideas, and they have to be rooted in the practical constraints of the economy.”

Certain ideas that have taken root in the past will find maturation and growth in 2012.

Wallets, Phones and Clouds

In keeping with the idea of hyper-connectivity and a democratization of innovation, technological advances will bring to the forefront that idea of the virtual wallet in 2012. Instead of using credit or debit cards, a device attached or built into your smartphone till allow you to pay for something instantly.

And we will all be using smartphones sooner or later and they will continue to get smarter and smarter. The explosive growth of Android phones and Apple iPhones will continue. Microsoft upped the ante with Mango, the update for its Windows 7 Phone, and watch for Facebook, which will likely go public in the spring, to launch its own smartphone.

Soon most smartphones will feature a voice operated assistant that you can talk to. Your own personal data servant. Siri, the voice-operated personal assistant app on the Apple’s iPhone 4s, was a huge technological breakthrough in terms of our connectivity.

Cloud computing will redefine what it is to own stuff. As digital information clouds continue to expand, we’ll be able to stream all of our music, TV, movies and books through subscription services. So long CD collection.

“It’s one of those frog-in-the-frying pan things where you’re unaware that you’ve changed your perception of what it means to own,’ says Stephen Abram, a leading international librarian. “It’s shifting from owning content in a physical format to owning priority personal access, and that’s going to keep happening in 2012.”

As you can see, I am not shy about relying on the thoughts of others, people smarter than me, to foresee and explain the future.

In public, I may even repeat some of these predictions and observations as if they originated with me in order to impress others that I am a deep thinker who sits and ponders away.

But you know that I am just a business consultant, a fellow who happens to read a lot and listen to people.

“Please forgive me if I talk like I know what I am talking about.”

Now that’s my idea of the consultant’s credo, although I suspect that few of my fellow consultants would subscribe to it.

My Big Prediction

December 21, 2012, is the winter solstice. That’s when the Mayan calendar reaches its end and some say the world as we know it. But now it’s my turn to make a big prediction and here it is: There will be no cataclysmic end to the world on that day.

I am not sure what else might happen on Dec. 21. But no end of the world. Remember that you heard it here first.

Need a partner in results-oriented site selection? Contact Dean Barber at 972-890-3733 or at dbarber@barberadvisors.com Barber Business Advisors, LLC, is a site selection and economic development consulting firm based in Plano, Texas. Please visit our website at www.barberadvisors.com