Wednesday, April 28, 2010


The Dow Jones average of stocks recently topped the 11,000 mark for the first time in

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

enough money.

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,

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

our ears?

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


  1. At the rate they are cutting down trees, we still won't be able to see the forests.
    Dennis Kucinich understands the problems, has the brains and integrity to guide, not lead.
    Unfortunately, in a culture obsessed with physical appearance, he was marginalized last election. There was more press about his short height, big ears, than his specific plans.
    People want the Prom King, not the most articulate on C-SPAN.

  2. This ia the kind of commentary I need from you Bernie. I was able to shut down all my conservative friends when you where on the air and talking about current events. I am having a hard time now finding information to use against there arguments now. I really miss you Bernie.