“More than one million engineers, for example, about 30 percent of the U.S. industry’s total engineering work force, will be eligible to leave in the next five years, according to a study by Deloitte”
Boeings decision to build the new wide body jets 777X planes with the latest technologies in Seattle is being forced by the reality; that skilled workers like engineers and machinists, are just not available in the other states that were ready to give billions in tax breaks, to welcome them to move there. Similarly Airbus’ plans to build a new plant in Alabama, is sucking in engineers from neighboring southern states. Aircraft manufacturing is getting more sophisticated needing advanced electronics and fiber composites and new engineering and manufacturing skills. Same can be said of the automobile industry and of many other manufacturing industries that are needed for our modern world. At a time when the US manufacturing is regaining its legs and a continued expansion of the economy appears on the horizon; the retirement of the baby boomers will cause a major shortfall, of engineers and qualified personnel.
A decade ago with the Y2K systems upgrades we had a similar situation; with a shortage of engineers and skilled coders for mainframes and major banking, financial, insurance and other large systems, that run most of the US computing. At that time the ramp up by what are now the IT majors in India to provide these services, helped bridge the looming gap. That problem was different as system maintenance and development does not need physical presence in the US; and can be done remotely from anywhere in the world, with the right information pipes and communication channels. You cannot build a car or an airplane remotely; and design and development has to be carried out near the actual assembly lines or plants, to ensure that they are practical and usable. While the Indian and Chinese universities are churning out millions of so called engineers they just do not have the right skill sets and need years of incubation and practical training to be able to do the jobs. In fact most Chinese engineers are not innovative enough and a majority of the so called Indian engineers are unemployable, without huge external help and training. Hopefully the setting up of research and engineering centers by giants like GE and IBM in these locations will help fill some of this gap.
Robotics and automation is now extensively used to replace skilled workers; and that has led to the demise of the working middle class, as union jobs disappear, as machines take over many repetitive and mundane tasks. So while a high school graduate could previously make a good living working on the assembly lines; now advanced mathematical and science skills are needed to use the machines and systems used in modern manufacturing. The collapse of the cities and the infrastructure decay is a result of the loss of these high paying jobs, for what was at one time one of the best educated workforces in the world. Now we need more advanced degrees and sophistication and it is at a time when the engineering colleges are not producing enough graduates for our future. The brightest engineers who are graduating are being pulled into the high-tech startups and internet age companies like Apple, Google and Amazon. Manufacturers are starved of talent and left scraping the bottom of the barrel for the dredges from the great universities.
The story is similar when we look across the economy at Pharmaceuticals scientists, bio-medical engineers, chemical companies, energy sector, petrochemical industries and the list goes on and on. While the US still graduates the largest number of PHDs in the world; they will not be enough to replace the baby boomers as they head off into their well-deserved retirements, sipping from tall glasses with strange little umbrellas after a round of golf or sunning themselves on a beach after a set of tennis or a jog or a swim. Instead of paying into the social safety net, they will start withdrawing social security and Medicare and Medicaid costs will continue to rise, putting a greater burden on future generations.
An engineering degree at a good private university now costs close to a staggering quarter million dollars and at the same time the high schools are not graduating enough qualified graduates, who want to enter science or engineering fields. Where will the next generation of engineers come from and the case in Europe is similar to the US or may be worse as their population is aging too and not enough replacements are available. Will the great western civilization reach its peak in our lifetime and die the death of a thousand cuts as the dearth of skilled personnel bring their mighty industries to their knees. Will the ‘Atlas Shrugged’ world depicted by Ayn Rand finally come alive; as the most capable retreat into their exclusive preserves leaving the masses to their fates, with less being produced and new innovation dying? The have and the have-nots are already living in different worlds, and the trend is multiplying all across the globe. Where will the resources and leadership come to raise the standards of the masses as poverty and hunger elimination can only come from raising productive citizens, who can better contribute to society and become self-sufficient? The race is on and the clock is ticking, as we fall further behind each day while billions more are adding to our earth’s burden.

Driving down the New Jersey Turnpike for many decades drivers would smell the foul smell; and see the lights of the giant refineries, and wondered why on earth would someone name it the garden state. Then the refinery lights went down and slowly the production moved to the gulf states as it became more expensive to move oil stocks up to feed them in the North East. As the lights went out it seemed a portent sign of the decline of America and its petroleum industry and the oil majors sought profits and capacity outside the United States. Europe with its North Sea oil, the Middle East with its huge capacity of cheap oil and Asia with its burgeoning demand became the standard bearers for new refining capacity additions. A death knoll on American refineries; and the general demise of its petro chemical industry, was being called by talking heads on major TV channels. They saw only a continued downward spiral; as costs remained high, and capacity utilization suffered. Even today the North East continues to import a major part of its consumption from abroad.
Little known to them; there were still some ingenious folks around the gulf coast; who were ready to take the risks, to turn things around. Their efforts paid off around two years ago, as the major refiner’s added capacity at an unprecedented scale to fulfill growing American demand and also to add surplus capacity for exports. “All these companies are expanding their export terminals—Valero, Shell, Marathon Petroleum, all of them,” said Fadel Gheit, senior energy analyst at Oppenheimer. “Any companies with refining assets on the Gulf Coast are expanding their export terminals. …The profitability is not that clear, but the trend is very clear.” From being an importer just three years ago; today the US has become the largest exporter of refined petroleum products led by Diesel, airplane fuel and gasoline. The death of the US industrial capacity was prematurely announced it seems; and now it is well on its way from not only being the bread basket of the world, but also the refiner for the world. The petroleum hydrocracking industry is exploding it seems; and it is driven by cheap gas and shale oil, and at the current rate it will add substantially to the rate of GDP growth in the US. Trade deficits as a result will be driven down; and Europe with its higher cost of gas and petroleum products from the previous Russian republics, will continue to suffer.
President Carter had warned decades ago during the fuel crisis; that the US needs to become much more energy efficient, if it is to survive as a leader in economic development. It has taken decades for the conservation efforts to pay off and with President Obama’s declaration of still higher fuel standards for the auto industry; demand in the US will continue to fall over the next decades, as old cars are retired and replaced with far more fuel efficient vehicles. At the same time the US is finally looking seriously at renewals; and wind, solar, nuclear, ethanol, biomass and anything else that can be technically possible, is being explored and developed. Venture capital and investments in developing the fuel of the future continue, from the risk takers and entrepreneurs. The greening of America will have long term repercussions for the rest of the world; as more efficient cars, trucks, trains, planes, houses, appliances, buildings and cities develop. Warren Buffet is buying up solar plants; as if they were going out of style, and as I fly across the US I see more wind farms cropping up. After decades of decline new nuclear plants have been cleared for development and will come online to support the growing electricity needs of this vast land.
The national debt is an embarrassment to some; as we owe trillions to the Japanese and Chinese and anyone else, who wants the safe haven of US treasuries. In fact those folks are wise, as they are investing in the greatest economic engine known to man. What counts is that America continues to grow its economy, invests in new research and development and converts it into new technical products and industrial production continues to grow its GDP; all else is just rustling of paper representing doomsday scenarios. Talking heads will come and go; but it is the ingenuity of the people and the will to pursue the next big thing, that will make or break us. Today forward thinking people are placing risky bets on refinery expansions; and tomorrow the lights may go down on these ventures, leaving idle capacity and major losses. Yet I thank these enterprising folks; as at least they have a vision to be the best and largest in the world, and are leading us to a brighter and more efficient tomorrow.

The pendulum of time swings heavily from bust to boom and back again, and I see my fortunes rise and fall with it. The last financial crisis was an outcome of unfettered greed; as everyone participated in a rising housing market, and the dream of ever bigger McMansions was a seemingly free for all. Banks lent without collateral; or verifying the ability of the borrowers, and brokers sold houses and mortgages to families who could not ever repay the loans. Politicians proclaimed the American dream of home ownership was finally here, and the rating agencies classified AAA ratings; with eyes closed, and fees in their banks. Everyone seemed to run out of money at the same time; and the cycle came crashing down like a house of cards, taking some big banks and a lot of pensions down the drain, with it.
Now we are at the other end with a seemingly inexhaustible flow of money; and corporations and big banks sit on trillions at low interest rates, with no borrowers in sight. Once bitten twice shy people sit on cash; as markets give all the signals of a bull run, that seems to push unknown companies into stardom, and make billionaires out of young people with innovative ideas. My life savings have been whip sawed so many times; that I no longer know what is a rational, or an irrational exuberance. My future seems closer to flipping burgers; than flipping houses, as I eye my sorry life time savings, and wonder how did I let it all come to this. The haves have it and all the others are just grist for the mill; as I taste the sawdust from their plunder, of our ecosystem, and decide to try to drown my sorrows yet again.
Sufficiently fortified I put my toes in the water to test the temperature; and watch in delight as Face Book soars, and Vale looks as solid as the Brazilian iron ore it produces. A few batted run does not win the game, but the inning is suddenly looking exciting again. CVS has a perfect 10 rating for a must buy, and United Health is fast catching up with a 9.8 rating. Happy days are here again; and we are off to the races, as every filly now looks like a winner, and the more adventurous are trading options and more advanced tools that I know nothing about. The pundits talk about puts and straddles, and the new vocabulary makes my head spin. Should I buy gold or silver; as copper soars, or will wheat futures be the thing, or do we short rice with the huge reserves in India and Thailand, that they cannot move. The world is suddenly there for me to buy and sell; but there is no capital here, and I watch on the sidelines as fortunes are made and squandered on the latest Tesla, American cup Yachts, luxury baubles and private jets. Everyday low prices attract the consumers; but the multiheaded hydra of inflation, is slowly creeping up unnoticed as easy money flows.
Abundance seems cheap only to the fools; as I know we all will have to pay a price eventually, for all we want to consume. Rising standards of living will push our capacity to produce; and deliver us into a tail spin, or an ever increasing circle of demand that cannot be met. Will the billions rise to grab their fair share from our mouths; or will we continue to spit out the seeds of contempt, at their wastrel lifestyles. They are not productive; and have no desire to produce, so they will continue to wallow in their well-deserved misery, we say. We have gone to school, worked hard, become ever more productive; at a high cost to our families and friends, and deserve all that we have earned. We deserve better and so we set our sights on that next status symbol, just as if it were our birthright, while others are left in our dust. Social re-engineering schemes leave us cold, political efforts at a more equal state are marked as shenanigans of the ultra-left, and when I try to enter your country club you offer me a bus boy’s job below minimum wage, or leave me to play tennis with your bored wives, as an afternoons entertainment.
The pendulum swings again and now I see that it is the poor who are hanging on to it desperately. They jockey for better positions and opportunities. They study and work hard and make sure their progeny is able to make its way higher, in this new world. The shackles of ignorance will be undone; as MIT courses and scientific knowledge, will flow freely to anyone on the web. Diligence and effort will make them equal; to the one with the privilege to attend an Ivy League, or play in the fields of Eaton or Harrow. Micro loans and the NGOs will bring much needed programs and capital flows, to the lowest strata. Ingenuity and opportunity will no longer be the realm of the few; and each brave new soul will blossom in a new world, with his or her own achievements. The have nots will not be denied; and they will rise on the sheer force of the need for betterment, hope and the pursuit of happiness, which is a fundamental right. We only have to get out of the way and let the pendulum of human endeavor take its course. Time will wait for none of us and we better start reshaping our thinking and our efforts; as in helping them, we will only end up helping ourselves.