Taking In Each Other's Laundry

Thumbing around the newspaper this morning, I was struck by two items in the business section:

1) PepsiCo to re-focus on soft drinks, and

2) GE tumbles 22% as expected.

What's not said about #1:

"Population only grows at about 1% per year. Assuming everyone is already drinking as much Pepsi as they ever will, our growth rate is...1%. This is far too anemic for Wall Street, a piddly-ass one percent, so we've had to expand our business into water, sports drinks, orange juice, and fake fruit drinks to be able to expand at the growth rates our shareholders expect in the consumer staples sector."

I would think that company growth could occur, sure...but at some point, don't you run back into that 1% limit? You can only get people to eat and drink so much. Humans make terrible consumers because there's an artificial market limit...their stomachs. They've worked around this limit over the past twenty five years or so by substituting high fructose corn syrup in most of their products that (apparently) causes people to eat more...hence our slobbish, overweight cartoonish nation.

Here's what's not said about #2:

"Our General Electric production lines, producing everything from jet engines to medical imaging, are actually doing OK. What's got our ass however is GE Commercial Finance and Ge Capital. These has been, far and away, our largest growth engines...but with the recent 'financial uncertainty' swirling around, well, we're not doing so well."

No shit! This is just one of a hundred other companies that realized fifteen years ago they can't compete in any globalized manufacturing capacity and have re-invented themselves as financial services companies. And man, wasn't that great for the bottom line or what? Pretty soon, everyone was involved in this racket...GM stopped making profitable vehicles and started making profitable financial products through GMAC. And then GMAC mortgage! They are getting a double dose now as both mortgages and vehicle sales are all fuckered up.

This is our service economy at work, folks...we think we are gainfully employed taking in each other's laundry, but no one is manufacturing any new clothes, washers or dryers.