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...slowdown on the world's assembly lines is a normal part of any recession. As demand shrinks, so must production. But now that the recession is easing, there is considerable debate among economists about whether manufacturers will be rehiring workers and restarting assembly lines anytime soon. Despite aggressive downsizing by industries like auto manufacturing over the past 18 months, there are fears that the world remains stuck with so much excess production capacity that any recovery will be anemic, plagued by deflationary pressures, high unemployment and ailing bank-loan portfolios. "Unless we deal with the excess capacity situation, we will...

Author: /time Magazine | Title: A Threat to Global Recovery: Too Many Factories | 10/6/2009 | See Source »

...Minding the gap isn't merely an academic exercise. Excess capacity directly affects the biggest question facing policymakers today: when to exit from stimulus programs that were introduced to combat the recession. Everyone agrees the cure for excess capacity is increasing demand, whether it is generated through a fundamentally strengthening economy or through artificial means like "Cash for Clunkers" measures. Turn off the tap too quickly before normal demand recovers, and the downturn could persist. "The best way of reducing excess capacity is by not prematurely unwinding stimulus spending," Lin of the World Bank told TIME...

Author: /time Magazine | Title: A Threat to Global Recovery: Too Many Factories | 10/6/2009 | See Source »

...spending patterns is under way. U.S. consumers, the usual drivers of economic growth, are reducing their outlays and may do so for years to come as they pay down debt. Under this "new normal" scenario, some of today's spare capacity may never come back into action because total demand will remain depressed indefinitely. Factories in some crowded sectors will have to be permanently closed or retooled to make different products...

Author: /time Magazine | Title: A Threat to Global Recovery: Too Many Factories | 10/6/2009 | See Source »

...huge demand for the Predators' eyes in the sky over the battlefield - reconnaissance that can't be provided by manned aircraft - has muted such criticism. While it took 12 years, from 1995 to 2007, for the Predator fleet to rack up 250,000 flight hours, it reached the 500,000-hour mark just 20 months later. The Air Force currently runs 37 Predator "orbits" 24/7 over Afghanistan and Iraq, which requires about 150 personnel, as many as 10 pairs of pilots and sensor operators and four Predators. While their most important mission is to provide ground troops with real-time...

Author: /time Magazine | Title: A New Kind of 'Top Gun' for a New Kind of War | 10/5/2009 | See Source »

...Although the Air Force insists this Predator training program is experimental and could be scrapped, don't bet on it. Schwartz told his new pilots the demand for their skills "is insatiable, and shows no sign of abating." And then there's the fact that the service just commissioned a new metal pin that Petrizzo and his fellow drone drivers will wear on their uniforms. While its central shield features a lightning bolt connoting the Predator's remote control, its wings will be identical to those worn by all other Air Force pilots...

Author: /time Magazine | Title: A New Kind of 'Top Gun' for a New Kind of War | 10/5/2009 | See Source »

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