Looking Back Ö Looking Ahead

by

John Wright

 

Wow! I just looked ahead, by about two hours, and proceeded to make a couple quarts of fresh salsa! Now that is true evidence of my prescience! I just know that I will need salsa! Around here, fresh salsa is received with joy bordering on reverence Ö And on the Níth day, he said, "Let there be salsa for the multitudes!" Ö and there was salsa. Yea, throughout the kingdom salsa poured from rocks and spouted up from the sands and all were filled. Indeed, all were soon coated with salsa and were sorely afraid of what the salsa meant. Worse, it burned delicate places. Yet, it was nothing, for in the grand scheme salsa was merely a blessing. The rest was fear borne of ignorance, and failure to bathe.

Anyway, here I am, ready to drop the weak humor (lately I am bored to death) and consider the subject of this article, which is the dismal economic progression of peoples across our great planet Ö with a particular interest in modifying where we are going. That is, today is a relative disaster for USA citizens re lost jobs (hell, Iím not even talking about the "published" unemployment rate todayÖ Iím talking about USA job losses since long before NAFTA), yet not exactly great where those "low" paying jobs have gone. Yesterday was almost as bad with the crash of the stock market (oh, yes, for many of us it did crash, not realign to sustainable P/E levels) and the utterly unsupportable yet expensive Iraq war. It would be "nice" to have some workable plan for making tomorrow better.

What I believe we need are some workable ideas for redefining success, such that the "global" businesses see some logic to saving jobs of all types within the USA. Any worthwhile student of logic or finance (you know Ö philosophy, MBAís, etc.) understands that a generalized massive downward spiral in wages globally for any/all given services/production flat out reduces the overall ability of the world citizens to buy anything sold at any price higher than zero. This is true in part because the span of affected goods/services and thus wages becomes, ultimately, complete.

We ordinary people lose because we all get reduced to the lowest incomes and find ourselves unable to sustain ourselves economically, for most of us carry debt burdens based on current or earlier larger incomes. If I can no longer make my mortgage payment I lose my investment and my shelter. If I can no longer contribute to my 401K plan I have a dismal future to anticipate. Are not the corporations getting rid of pension plans and undermining medical benefits? Is Social Security in any way adequate for financial survival in retirement, and, has it not been changed negatively in terms of how long you have to wait to get it?

This jobs bullshit is not capitalism Ö it is gross stupidity amalgamated with endless greed/fear. Use of the tired old claim that lower prices are capitalism in action and are "good" is a deliberate misrepresentation of the planned and job/life destructive games of the corporations. What we have is cunningly planned deflation, and the consequences are and will be terrible. I just watched the idiots/shills known as Kudlow and Cramer proclaim on CNBC® that the USA doesnít need the lower end jobs (all the way up through software development) because we are "creative" and "educated" and, and Ö would someone please shoot those lying sacks of shit, and their sponsors?

You see, no one has changed the distribution curve for aptitudes or the general intelligence across our population. This means lost jobs cannot be replaced by our being more creative or better educated. It simply means the weak suffer Ö and then the comparatively stronger become weak and suffer, and on it goes. There is no such thing as migrating from a manufacturing economy to some other gloriously successful kind of economy Ö unless, of course, you happen to be an already wealthy financier. My, well, that sure defines us, doesnít it Ö HA, HA!

Our present and our future do have a direct relationship to the time line from pre-NAFTA to coming global depression, and those who can cash in on the temporarily increased profits by sending any work offshore to be done at slave wage rates will become wealthy. Here at home we will have more examples of Wal-Mart® and McDonaldís® versions of "fair" wages and, uh, benefits? It isnít pretty, folks.

Recently I listened to Alan Greenspan mention his "concern" that we might enter a period of deflation. Think about what that really means. Deflation can occur when new and cheaper ways are found to provide something (sounds good, huh?) Ö and that is what Wal-Mart has done by paying their employees poorly and providing essentially no benefits. Thus, Wal-Mart prices are comparatively lower than those found in stores where employees make a living wage. Hmm Ö Wal-Mart also squeezes suppliers into providing their products to Wal-Mart dirt cheap based on probable high sales volume and fear that Wal-Mart might instead sell a lot of a competitorís product. As Wal-Mart puts all competing businesses out of business in any locality, and squeezes suppliers to marginal or no profits, a supply-chain monopoly is created. Monopolies are not good for ordinary citizens as they eventually squeeze the citizens by raising prices in an environment where the citizen has no alternative/competitive choice. Oh, crap! I forgot all about the "I donít need it at all, strategy!" How dumb of me!

Deflation can be very bad ... consider the equity in your home and the fact that your mortgage company is not in the business of carrying unsecured debt. Imagine if the value of your home dropped in the next five years by 25%. What would happen? First, you might not be able to sell it without declaring bankruptcy, particularly if your starting equity was less than 25% (do the math!). Second, you might be forced to pay a lump sum to your mortgage company to keep them from "calling in your loan." Do you, uh, have a nice lump of cash waiting in reserve for THAT possibility? How many of you are aware that your mortgage company can call in loans at any time they believe their investment to be at high risk? That is to say, if the value of your home falls below the debt load on it, your mortgage company will act, and not on your behalf.

Okay, the longer you own your home the more you could lose relative to the price you paid for it. Who would want to buy a home with the realization that they would likely lose money going forward? What do you think that would do to the new housing market and to the sale of existing homes? How would you like to look forward to making fixed or increasing mortgage payments at the same time your property value and income are declining? Yeah, we arenít used to that possibility now, are we?

All you have to do to understand the likelihood and consequences of deflation is to visit a depressed city or town that was previously well off for, letís say, fifty to one hundred years. First, ask what happened to the high-paying jobs, whose disappearance is why the city is economically depressed? Then, look at the value of real estate today Vs that time prior to depression. Thatís right, folks. You just discovered deflation in action. It isnít hypothetical. It is very real and highly destructive for those who own and/or owe money on a property when a geographic area enters a deflationary cycle. It has happened in "Spades" in the USA in the last 25 years. For example, look at the steel and coal towns/cities in Pennsylvania. I can pick up a fine house today in a depressed area in Pennsylvania that I never could have afforded prior to the deflation, provided I have saved (hoarded) lots of money prior to the deflationary period. To the tune of "I wonder who is kissing her now" Ö sing, I wonder who is hoarding cash now ??? Hey, if you donít know the answer to that question you are too weak-minded to be helped.

Previous homeowners become renters. The notion of investing in a home for future security becomes silly. Wages are so low that saving cash is impractical, as all that is earned must be spent just to eat and pay rent. Banks foreclose and the wealthy eventually buy up everything in sight for a song, after it hits rock bottom. If you think about it, it is robbery. The very people who undermine the economy by outsourcing jobs are the people with the profits, who then hit the citizens a second time by virtually stealing anything by buying it at a forced low price.

As a youth (1950ís) I was taught that unions drove wages up so high that manufacturers couldnít make a profit without inflating the selling price of their products. I was also taught that product quality declined in an effort to maintain profits, and that opened the door to later foreign competition from Japan and Germany, either of whom could make superior products at much lower prices. How could they do that? The workers were paid little in Japan and the workers had a low standard of living compared to USA citizens.

Inflation prior to foreign competition was high. Product quality was bad. Japanese steel prices were low enough for equivalent product to nearly bankrupt US Steel Ö now known as USX. Visit some of the steel towns in Pennsylvania and you will find industrial graveyards and the sad deflation scenario I described above.

But did the unions really wreck the economy? Were they the primary causative factor? Were high wages in heavy industry the primary cause of inflation and poor product quality across the whole economy? Did the high cost of doing business re wages keep the industrialists from investing capital to modernize steel plants, so as to be competitive with foreign producers? Was this also true for our big three automobile companies, whose quality problems and lack of imaginative design and feature changes were endemic by the 1970ís?

As I look back in time to my early adult years and consider the above questions, I start to realize that no single cause did much of anything. Instead, we happened to be on a socialistic kick in the 1950ís and 1960ís and 1970ís that led to too many entitlement programs and attendent high government costs/debt. Add in the costs of the stupid war in Vietnam and it becomes obvious that high inflation was a given. Oil costs were the killing stroke to our economy after 1974. Foreign competition in steel, automobiles and electronics became very real indeed. But letís be clear that the ordinary citizens had it pretty good until the mid-1970ís. Expectations were high based on results.

Most everyone expected to become a homeowner and have a new car every few years, and to have dependable job security with regular pay increases and promotions, and plenty of leisure time. An eight-hour workday meant exactly that Ö after your normal hours you went home. Likewise, most people expected to send their children to college Ö and to be able to afford that expense. Health insurance was not high on the list of citizen concerns because medical costs had not yet spiraled out of control.

For the most part, women stayed at home, which contributed to a good home life for the children during the day and later for the returning working husband.

In the short space of a decade, from 1975 to 1985, the USA went through a major economic convulsion. Women demanded and got better jobs. Oil prices went through the roof. Inflation reigned. Foreign competition cleaned the clocks of our automobile, electronics and steel industries. Medical costs rose criminally as there was no sound reason for that to happen other than abuse of Medicare. Marriages ended often and close family life pretty much became a memory.

Whereas we once had job security and advancement, all of a sudden downsizing became the order of the day, in the period from 1980 to 1985 and beyond. Paternal companies became nasty. Deregulation trashed quality on behalf of price in the airline industry Ö and that industry has been in dire financial straits ever since. Hospitals became "for-profit" companies, and that led to poor service in a captive industry with attendent high costs for customers.

It is as if the confluence of higher oil prices, too many workers, due to the influx of women into the workforce in large numbers, foreign competition and poorly conceived and executed entitlement programs all conspired to ruin life in the USA as we had known it. And make no mistake, life was ruined for the ordinary citizens. So here we are today with more of the same. The degradation of ordinary people continues. Behind it all, however, there lurks the unanswered question, "Who did this to us?" And after that, "How do we get out of this trap?"

Yes, it takes some time to degrade the citizens of the world. Yes, we are thrown into the "boxing" ring with numerous other simple, insecure people in/from other countries who want to have a decent life there/here. Yes, the MFís who are making the events happen will ultimately lose. They simply do not yet see far enough ahead in time to grasp their stupidity, both for Humanity at large and for themselves in particular. They are not students of history or they would see that extreme greed and the social displacements caused by it result in major swings towards socialism. Remember FDR? Do any of you conservative Republicans really want another round of socialism in the USA? If not, wake up and smell the coffee! You have pressed the wealth and control issues way too far, you have cruelly hurt the little people, and if you donít back off you may learn about "socialism with teeth" when a "gross assets tax" becomes the basis for annual payments to the next generation federal government.

Those in apparent power now appear to believe that there is a "time" function that they own that will allow them to escape the consequences of their actions. Are they nuts? Perhaps not, for they and their loyal underlings may be among those who have elected to have no children, which means they may escape consequences by bloodline death.

What an interesting notion! I can escape eternal death, or fire and brimstone, or whatever the "hell" anyone defines if I refuse to commit myself to the future by virtue of failing to reproduce myself. Oh, dear! It is, ah, rather too late for me. Yet, I know others who hoard their genes for reasons I do not value, or necessarily understand, so perhaps they also have some sense of the manmade economic doomsday scenario presented above. Perhaps there are even some optimistic selfish folks who imagine that their behaviors have no consequences for their offspring, Ö or maybe they donít care. If life is an endgame, why not be a financially successful prick? If I steal enough now, later political upheaval and socialist legislation will never get back enough from me to matter Ö

A word of caution Ö to our common and complete knowledge, we are still waiting for the Human seer who can rationally explain Human experience, and particularly what the future is likely to bring. Earlier seers were obviously full of shit, as they have reliably had us failing totally or succeeding ridiculously well Ö neither of which is found in Humanityís actual experience! How about now? What do you know, personally, that supercedes Humanityís common experience up to the present time? Is life really an endgame? Think again, and if necessary, again (provided generously for the apparently but not actually bright).

Meanwhile, I think Iíll eat some chips and salsa Ö that is about as far ahead as I am comfortable looking at this time.

Okay folks, Iím back at it again Ö refreshed (uh, huh) and champing at the bit! So, letís consider the idea that when power coalesces, problems of major consequence happen for the ordinary folks. That is the path of history and it is undeniable. The extent of coalescence of power and therefore, wealth, defines the extent of the decline in the standard of living and social freedoms of the common folks, relative to what they otherwise would have had, ergo free use of local natural resources of all types. Sounds sort of Libertarian, doesnít it! That those same simple folk would also reproduce to the point of destroying those same natural resources (or entitlement programs!) is something I would rather not consider Ö but must, to be fair. Without fail, the stupid over-graze the pasture, every time! Sounds sort of Fascist, doesnít it!

Yes, I know that there are those of you who will argue that Ö for example, without the smart and later wealthy, we would not have wonderful conveniences, like cars! Oh, my Ö I think you just stepped into something that cows avoid. Can you prove that cars or any other large mass consumption object have resulted in gross improvement of life? For example, do you own your big house or does it own you? Under what conditions are our possessions helpful? I am not a Luddite. I am unbelievably pro science and pro implementation of scientific discoveries, yet in the hands of the selfish wealthy; each and every discovery is turned into a disaster for Human happiness instead of a glowing success. There is no ethic of kindness within that group. There does appear to be an undying need to have slaves. And frankly, the slaves have continuously demonstrated that they are unable and constitutionally unwilling to help themselves.

That I have a car that my ancestors did not, I can travel farther and faster Ö but to what purpose Ö and more to the point Ö to whose purpose? The darker side of me wonders if cars are simply small ships delivering us captured "niggers" to work! If so, the fruits of science/technology/engineering have been perverted and redirected away from simple human happiness to, primarily, human bondage. I can only watch the inbound commuter traffic down route 101 into San Francisco with the painful realization that the poor suckers caught up in two or more hours per day of "commuting" are throwing away 25% or more of their personal waking hours, five days a week, for around 35 years. Add it up and you too will be dismayed.

Enough of my musings Ö looking back, looking ahead Ö what is the point of my diatribe? If you have an ever-expanding cornucopia of technological wonders and a decreasing quality of life for you and your offspring (if you even can sense that) then something is drastically wrong. Some control mechanism is usurping the creative output of Humanity, and especially our precious time and financial security, and using it against us. We have crowding and loss of personal time everywhere! Who or what is it/them? What can be done to return to the relaxed pursuit of leisure activities for generous chunks of leisure time and disposable income of the 1950ís and 1960ís? Do any of our young people really understand how badly life sucks in the USA today compared to only 40 years ago? Hey, in case you didnít read the last sentence, if you are less than age forty, life SUCKS in the USA today, compared to when your Mommy and Daddy grew up!

Letís dispense with possible fears of silly paranoia by the old fart author of this article, by expanding our area of concern Ö what about the people who are working for 25 cents an hour or less in Pakistan, Mexico and elsewhere? If we care about them as well as ourselves, we know that they have been thrown into the pit to battle to the death with us. Are we dogs or cocks or any other game animal so low on the food chain that we are deserving of this treatment? Are they? Is it my imagination or is it true that only a few wealthy pricks, on a percentage basis, have really put the screws to the rest of the Human Race? Can we not beat them to a pulp now? Can we also show some personal reproductive and life planning discipline? (Read my thoughts Ö " If there are fewer of you for the jobs available each of you will be valued higher. Success can happen if fewer compete, including gender considerations.")

Any action that intentionally undermines the economic wellbeing of major numbers of citizens within the USA or elsewhere in the name of corporate profits must be seen as illegal, and must be stopped by laws that deny corporations the ability to outsource work offshore. There must not be monopolies or the trusts and interlocking BODís of old. Wealth and market share limits must be imposed on companies and individuals. Trade agreements that are promoting employment discontinuities in the USA can be stopped by one simple and final refusal to continue honoring such trade agreements. All the bad decisions to undermine employee security made by corporations with tacit agreement of politicians can be undone by your federal government, if you force it to save our jobs through your selection of non-party (that means no orthodox Republicans and no orthodox Democrats) candidates and your votes.

Or would you rather wait until it is you who become financially insolvent? Or maybe you would like to help breed more slaves who will have even less than you have? Or, maybe you are already there, in which case my thoughts mean nothing.

Take your stand and see this through.