nineteen months. Interest rates remain low and inflation remains under control. Yet, the
experts aren't ready to proclaim the end of our national economic nightmare because
unemployment is still too high, foreclosures are still up, and the commercial real estate
market is a disaster. And guess who is to blame? Everybody's to blame. We aren't spending
Two-thirds of our economy's health depends on robust consumer spending. If Americans
don't spend money, businesses don't order new goods and services, employers don't hire new
workers, factories don't ramp up production, and our economy remains moribund. Even if
banks agreed to lend money to businesses small and large, if capital was available for start-up
companies, and if Americans don't spend a high proportion of their income on consuming; our
economy will remain weak. Patriotism is now defined in terms of conspicuous consumption.
The entire system of capitalism and free markets is ultimately a game of goods chasing money;
the question becoming: Will there be a time when we can't consume fast enough to keep the
system operating? You bet, just look around.
Americans need jobs in order to make the money to spend on consumption. We work
to earn money to meet our basic needs (food, shelter, transportation), while having enough
left over (discretionary income) to buy everything else. But, it seems wages and salaries in
many occupations aren't adequate these days; that is, if you are lucky enough to have a job.
This is not to say that wealth isn't being generated; it is, but it's being concentrated in fewer
and fewer hands.
Since 1973, the average American worker has seen almost no raises exceeding the rate
of inflation, meaning we have been losing buying power each year. Women entering the
workforce compensated somewhat for that loss, but cannot do so anymore. Unions, which
helped to create the middle class and put upward pressure on wages, have diminished to less
than 10% of American workers due to a combination of an eroding manufacturing base and
a constant attack by the wealthy and powerful to drive down the cost of what they pay in
wages and benefits. Simply put, the vast majority of people in America, you and I, are losing.
We don't manufacture much in this country anymore. More and more we import nearly
everything from oil to textiles to steel and at the same time we export less. Jobs which used
to pay a living wage become fewer and fewer as we continue our transition away from
manufacturing into both service and information. Agreements like the North American Free
Trade Act (NAFTA), the General Agreement on Trade and Tariffs (GATT), along with
membership in the World Trade Organization (WTO), have enabled the process of
globalization to explode, decreasing the total number of good paying jobs. Globalization
means the average American worker loses, both in the short run and in the long run.
President Obama wants to create new "green" jobs especially in the area of alternative
energy; however, billions of dollars in federal subsidies will end up going to China since they
are the leaders in wind-turbine technology, thus creating big subsidies with minimal payback
in jobs for Americans. Obama and his Democrats want to spend billions on a new generation
of nuclear technology; but once again, no American company exists to build the plants and
the trickle-down money will go to investors and foreign professionals, creating jobs for
foreign-trained workers from other countries. Want to build clean-burning garbage plants
which create energy reducing our dependence on fossil fuels, avoid the need for new landfills,
is relatively pollution free, and deals with the ongoing problems created by our "use and
throw away" economy? Well, don't bother looking in the U.S., you'll have to go to the
Netherlands to see it working in all its glory.
As we spend over a trillion dollars (1,000 billion dollars) on wars in Iraq and Afghanistan
and maintain an annual military budget of over $500 billion a year, our global competitors
are busy funneling their precious national resources into alternative energy, more efficient
public transportation systems, state-of-the-art steel manufacturing, and automobile factories.
While they improve their domestic capacity, we have been busy unilaterally dismantling our
industrial base for the last forty years.
Americans have been told our current situation was inevitable. We have gone broke
being the world's cop, while being told to accept globalization whether we like it or not. We
are told we have to take responsibility for many of the worlds ills. Imperialism is now
disguised in an expensive new suit and justified as defending freedom and democracy. One
could easily swear our enemies had taken over our domestic and foreign policy. Policies
clearly designed to destroy our economic base and turn us into a bankrupt debtor nation,
dooming us to exporting raw materials and skilled workers, while importing finished goods.
Do you remember the arguments made by Clinton, Rubin, Greenspan, et.al.?
Globalization is inevitable, the key to national survival is competitiveness. We must now
compete worldwide for jobs and product markets. Americans had better get used to it.
Jobs are going away. We were not asked to embrace this new economic model; we were
commanded to obey and to blindly accept it. Strangely, at that time, the U.S. was economically
invincible. Look at us now.
We have an electrical grid which would make Haiti blush. One failing substation can
black out the entire East Coast. Our infrastructure of roads and bridges is crumbling before
our eyes (remember the bridge in Minnesota?). Hundreds of billions of dollars are needed
NOW to keep our nation operating. This is the 21st century's political hot potato. Other
nations are able to provide internet broadband access to their people at speeds four to six
times faster than anywhere in the U.S. This gives them huge competitive advantages in energy,
technology, and information. What's to become of an America worn out and in debt up to
The answer, so our politicians say, is to spend our hard-earned cash on a broad, mostly
unnecessary array of products our competitors are busy making that somehow we are morally
obligated to consume. Problem: Americans cannot consume enough to turn the clock back
to the days when our economy sustained a vibrant middle class. The reality may be that
the world ultimately will not be able to spend enough to match the needs of the market to
provide goods and services! Globalization will force nations to specialize, to seek niches
they can serve better than their competitors. Internal disruptions, especially unanticipated
natural disasters in one part of the global marketplace, will immediately lead to devastating
human consequences in markets across the globe. The collapse of the mortgage securities
market in the United States led to economic turmoil all over the world. A volcano in Iceland
devastated the economy of Kenya; because without airplane flights, they could not get their
roses to market. A globalized and regionally specialized world market would be "nice" in
a perfect world; but it's a fairy tale in the real world of politics and natural disasters.
So, Americans are expected to spend more and more, while the jobs created are paying
less and less; and the cost of everything from healthcare to energy continues to rise. This
equates with economic failure in a fool's paradise. Our main problem seems to be we have
no national economic plan. There is no vision of where our nation is headed or what our
future should look like. Dealing with healthcare costs could have been a start; but the debate
in Congress failed to address any of the concerns I have raised. Washington has its head in
the sand. We have transitioned from a manufacturing to an information and service-based
society. Money for basic research has become such a low priority that it has all but dried up.
The infrastructure to support our current and future economy doesn't exist. Education is
understood to be vital to our nation's future; and yet we make college more and more
expensive, limiting those allowed to attend and saddling those lucky few with huge debt
burdens, graduation or not.
If consumers don't spend their money, the economy won't recover. Capitalism depends
on consumption. Yet, who of us right now feels honest confidence in our future? A future of
rampant globalization and fractured communities, the helpless feeling of smaller and smaller
paychecks, the knowledge that wealth is being created, but only for the fellow on the cover
of that slick magazine, a magazine you can barely afford that constantly teases you with that
ever more distant myth called the "American dream". And what are our politicians doing?
All the while, they are spending our precious blood and national treasure on unwinnable and
immoral wars and arguing about whether or not to reform a financial industry which almost
toppled our nation without firing a shot. Sad. Like a sick old dog chasing its tail.
Our nation desperately needs true leaders who will rebuild this country, create jobs, and
compete against the interests of other nations that are quickly surpassing us economically.
Do you hear anyone talking about any of this? What do you think? I welcome your comments
and rebuttals. Please send them to email@example.com